A group of residents blocked Carters Lane in Sutton Forest at the beginning of October to prevent Hume Coal from accessing a property to carry out exploration drilling.

The company took the owner of the access road, Ross Alexander, to the NSW Land and Environment Court to seek an urgent injunction that would have had the blockade removed.

MORE: Stand-off over Sutton Forest blockade 

Yesterday, the court dismissed the application and listed the matter for directions next week, finding there were several serious issues to be tried.

The decision means a final hearing on the matter is not likely until early next year.

Southern Highlands Coal Action Group convener Peter Martin said the decision was a "big victory".

The action group organised the blockade of Carters Lane with Mr Alexander's permission after finding out the company had struck an access deal with a landholder who used the road.

"The main thing is we knocked them off on the injunction, which I think was really a legal attempt to bully the Alexanders ..." Mr Martin said.

"It's going to give huge confidence not only to our community but also to other communities around the state that at least common sense prevails in our court system."

However, he called on the state government to put "proper protection" in place to ensure "communities like ours don't have to fight off big companies like this in court battles".

Hume Coal is a joint initiative between Korean steel company POSCO and Cockatoo Coal.

External affairs manager Kelly Lofberg said yesterday's court decision simply meant there were issues in the dispute that needed to be further heard.

"While we are disappointed that all of the issues raised in the course of the case have not been resolved today, we will continue to argue our case strongly at the final hearing and remain confident there are no legal impediments to our accessing this property," Ms Lofberg said.

"We hope this matter can be resolved quickly in the new year so that we can finalise our exploration."