Lawyers for resident Kevin Lewis argued that an earlier High Court ruling should be overturned, claiming that locals have rights to use the land. If successful, the case could have wide implications across the UK, leaving more land open to registration as communal village greens.
Redcar and Cleveland Borough Council wants to develop the Coatham Links with Persimmon Homes, but the plans have been vehemently opposed by local people.
It is the fourth time that the scheme has ended up in the courts after the original permission was found unlawful because it was granted during the local election purdah period. The decision was then overturned.
In July, Mr Justice Sullivan concluded that residents could not use the land "as of right" because it is owned by Cleveland Golf Club. But Charles George QC, acting for Lewis, argued that public rights are enshrined in an "unwritten rule" of the club.
The council's barrister George Laurence QC said suggestions that golfers and residents enjoy equal rights is contrary to common sense. The appeal court has reserved its decision.