A Supreme Court decision has provided fascinating insight into the shambolic and costly planning issues being created by a major housing expansion that will funnel more than 90,000 people into the southern outskirts of Sydney.

Key points: Wollondilly councillors and NSW opposition plead with the NSW Government to pause plans for major housing expansion south of Sydney

Wollondilly councillors and NSW opposition plead with the NSW Government to pause plans for major housing expansion south of Sydney Supreme Court documents show developers are encountering planning problems due to the absence of state infrastructure

Supreme Court documents show developers are encountering planning problems due to the absence of state infrastructure The documents show conservation planning, in core biodiversity sites 'lacked finality', endangering koala habitat

The Greater MacArthur 2040 plan, unveiled in November 2018 outlined a vision for a new corridor of growth stretching from Camden through Menangle to Appin and Wilton.

Councillors in some of the surrounding townships have expressed despair at the plan.

South west of Sydney, Wollondilly councillor Noel Lowry said he believed the proposal was emblematic of a broken planning system.

Wollondilly Councillor Noel Lowry is warning the government the project will create a lung cancer for Sydney. ( Supplied to ABC by Councillor Noel Lowry )

"Developing Wilton is creating a lung cancer for Sydney," Mr Lowry said.

"Because we are the lungs of Sydney out here right on the side of the catchment areas or our water supply.

He has a desperate message for the new NSW Planning Minister, Rob Stokes.

"Please intervene!"

Six new precincts in zoning rush

Six new precincts have been created in the rezoning rush since the plan was revealed.

The government decided funding for infrastructure to support the expansion would be collected through a Special Infrastructure Contribution (SIC) at 'no cost to government', putting a levy of more than $55,000 on each dwelling for developers.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 8 minutes 28 seconds 8 m A growing number of Australians are moving to the outer suburbs ( Jason Om )

In its planning documents, the government said the SIC would provide $1.58 billion for key infrastructure.

But prior to the March 2019 NSW election, Wollondilly Shire Council said it had identified a $500million shortfall in state infrastructure including basic emergency services, roads, health and education.

Wollondilly Mayor Matthew Deeth had repeatedly urged the Government to pause the project until there is certainty on infrastructure.

Developers caught up in legal disputes in absence of infrastructure

This week, documents from a Supreme Court ruling have revealed some of the planning problems being encountered by developers, as they navigate the space absent of state infrastructure.

Wollondilly Mayor Matthew Deeth warns a $500 million infrastructure funding shortfall in the the Greater MacArthur plan. ( ABC Illawarra: Justin Huntsdale )

Chinese backed company Country Garden won its battle against Sydney based developer Bradcorp in a contractual dispute over the sale of the $297 million, 5,000 home master plan for one of the Greater MacArthur areas at North Wilton.

Bradcorp started the proceedings against Country Garden for not going ahead with the agreement to buy its North Wilton project.

Country Garden decided not to exercise the option to acquire the 870-hectare site because there were unfulfilled commercial conditions that would stop the land from being properly developed.

After a six day hearing, the Supreme court dismissed Bradcorps's claim and ordered it pay costs.

The documents showed Bradcorp had failed to meet some rezoning requirements and was not able to provide access from its development to the Hume Motorway.

In February 2019, Bradcorp wrote to neighbouring developer Lendlease offering to buy the off-ramp land, but Lendlease already had plans for more housing on the site.

"In this context, what was required was a zoning which would, in effect, dedicate the land to building the required road works, not a zoning where Lendlease would have a choice either to build the road works or to use it for building houses instead," Justice Parker said.

Bradcorp has said it will appeal the decision and is determined to forge ahead with the project.

The court documents also highlighted environmental concerns and found conservation planning in general "lacked finality" and pointed to developers making decisions in "core biodiversity sites" based on the yet to be completed Cumberland Plain Conservation Plan.

Environmentalists have also warned about the impact of the development will have on the region's koala population and last week the NSW Environment Minister said he would talk to cabinet about establishing a national park for the local koala colony.

Local Labor MP and Shadow Minister for Local Government, Greg Warren said the Supreme Court ruling was symbolic of the government's failing on this project.

"When you have two developers going at it in the Supreme Court, that says more about a government and their failure to deliver the direction of leadership required for local communities, developers and councils."

Calls to hit pause on the plan

"The Greater Macarthur plan is flawed, the reason it is flawed is there is not the outline of the services, infrastructure, the road, the rail, the hospitals the schools that these future residents will need to build have a sustainable community," Mr Warren said.

"If it is good enough for this government to shovel thousands of new families into areas like MacArthur, then it is just as good for that government to provide the services and infrastructure."

Mr Warren said the government must hit pause on the plan.

"They have to close the boom gate on this and then go and have another look because it is an absolute outrage that they have not planned what these future families will need."

Minister Stokes was expected to face questions about the government's Greater MacArthur plan in budget estimates today.

Greens MLC David Shoebridge said questions about the project would be front and centre of his focus.

"Clearly we want to know what the government's plans are for infrastructure and in light of the obvious concerns even from the developers about the inadequacies of infrastructure, whether the government is going to review the targets and go back to the community and revisit the entire plan."

Mr Shoebridge said there was an urgent need to pause the project.

The ABC had contacted Minister Stokes for comment.