Changes sought by TKC Holdings included making exceeding the cap a "non-complying" activity rather than prohibited outright. It also wanted a management plan-styled approach instead of "prescriptive standards".
Mr Cooney, who set the tone for his opening by reciting the WB Yeats poem The Isle of Innisfree, said the island was a special place, defined by the rugged wilderness of the low-lying forestry barrier with its outstanding, unspoiled visual qualities, significant ecological values and the cultural relationship that the people of Matakana had with the entire island.
He said the challenge to the density cap brought into focus the question of whether the forested side of Matakana was an outstanding natural feature and landscape. The Bay of Plenty Regional Council's coastal environment plan ranked it as significant and a subsequent report elevated this to "outstanding".
However, Carrus and TKC said the "outstanding" ranking should be confined to the island's coastal margins.
Mr Cooney said a decision by the court on whether the whole of the forested barrier was an outstanding natural feature was important to the proceedings.
Most of the key planning restraints were being challenged to make development more permissive, he said. The appeal hearing continues.