Justice Carl Thompson has issued a temporary injunction to a property development in the town of Portugal Cove-St. Philip's.
The city of St. John's is opposed to the development because the land falls within the watershed area of Windsor Lake.
The town had issued a permit to a developer — but the city objected, arguing it could harm the water supply.
Clearing of the one-acre lots began about five weeks ago.
City officials had asked for all further work on the property to be stopped, for the land to be restored, and for the town to be restrained from issuing future development permits in the area without the city's approval.
On Thursday, Justice Thompson agreed to one of the requests, accepting the city's argument that the watershed might be at risk, and issued a temporary injunction to stop all further work.
That puts the issue back in the hands of the town, the city and developer to find a solution.