WAKOOL Shire residents have taken their own council to court over a proposed dairy processing factory in Barham.
More than a dozen residents are opposing the development approval for the $2 million Jonesy's Dairy Fresh factory at 49 Parkman Avenue.
Solicitor for the group Tammy Barker said the council had not considered a range of important factors in approving the development.
"My clients are not against the dairy processing plant itself, they just don't like the idea of where it is," she said.
"The industrial area is located within the residential area; I think the closest house (to the factory) is ninety metres away."
The residents have a raft of concerns they intend to lodge through the New South Wales Land and Environment Court, including odour and noise, long operating hours, heavy vehicle traffic and impact on property values.
They also claim a higher offer for the sale of the site was rejected on the basis it would employ fewer people.
With the Dairy Fresh application, fees were waived and noise and odour assessments were allegedly not carried out.
"We're pretty confident (Wakool Shire Council) haven't followed correct procedures," Ms Barker said.
Wakool Shire Council approved the development in September 2011, but with conditions, restricting operating hours to 6am to 6pm weekdays due to a lack of information supplied on noise and odor impacts.
Council imposed an 18-month trial approval period on the basis of those concerns.
But Jonesy's Dairy Fresh re-applied in October for 6am to 12am Monday to Friday opening hours and no trial period. This application was approved.
Councillors voted in November to approve the factory's proposed hours of operation, which included 7am to 5pm hours on Saturdays and truck deliveries on Sundays.
Council's general manager Bruce Graham said council was yet to receive the specific points of claim in the case.
The deadline for providing the claims is February 24, with the next court appearance set for March.
Mr Graham said he was concerned about the cost to ratepayers for legal expenses.
"We're always concerned, but the process the (development) applicants were going through was a different process, so obviously we'll need to defend the situation."
Jonesy's director Wayne Somerville said the company was "extremely disappointed" with the opposition to the development.
Mr Somerville said the factory, which would produce cheese, yoghurt, pouring cream and flavoured milk, would bring 30 jobs to the town.
"(The Factory is) going to be beneficial to the area -- if you've got a strong economy with jobs, (house) prices will probably follow suit," Mr Somerville said.
"There's a lot of them in Melbourne in built-up areas... it's a case of 'all very nice but not in our backyard'."
Despite gaining development approval, the company received legal advice to halt construction while the legal battle is underway.
The case will next appear in the Land and Environment Court on March 12.
The court has the power to re-approve or dismiss the development application.
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