Kawaiaha'o Church's plans for a new multipurpose building suffered a setback in state Circuit Court yesterday.

Circuit Judge Karl Sakamoto denied motions by the church and the state seeking to dismiss a case that accuses the venerable church and state Department of Land and Natural Resources of fast-tracking the $17.5 million renovation project in violation of state burial laws.

Often described as the "Westminster Abbey of the Pacific," Kawaiaha'o is one of the state's oldest and best-known churches. Many members of royalty are buried there, among them King William Charles Lunalilo.

The project involves replacing the 69-year-old Likeke Hall, the church office building and an 18-stall parking lot with a two-story multipurpose building.

Work began in January but was halted after burial remains were discovered.

Campbell Estate heiress Abigail Kawananakoa, the niece of Queen Kapi'olani's great-grandniece, filed suit in July, claiming that the remains of her ancestors and others had been improperly disturbed and that the state allowed the church to bypass the scrutiny of the O'ahu Island Burial Council, as well as other regulations.

"My client wants (the church) to follow the procedures that are in place to protect not only her ancestors' graves, but to protect the public," said George Van Buren, Kawananakoa's attorney.

Pointing out that dredging for the project already has resulted in the uncovering of 69 sets of human remains, Kawananakoa wants the church to gain approval from the O'ahu Island Burial Council, conduct an archaeological inventory survey and complete an environmental study before it proceeds.

The cornerstone of the church's defense is that because the church maintains an active cemetery, it is outside the jurisdiction of the Public Trust Doctrine and therefore not subject to its more stringent regulations.

"Kawaiaha'o Church is a known, maintained and actively used cemetery that is not subject to the burial laws related to the prehistoric and historic burial sites," the church said in court documents, which also point out that remains were buried in the cemetery as recently as July.

Sakamoto urged the two sides to seek mediation in the case, and attorneys for both sides said they are amenable to that.

Van Buren said the judge "found that their reliance on an exception for actively maintained cemeteries was unavailing," striking a blow to the church's major argument.

But Crystal Rose, an attorney for the church, said the only thing Sakamoto decided was to allow the case to proceed.

While Sakamoto may have indicated that he now agrees with Kawananakoa's view that the church is not exempt from burial laws, "we welcome the opportunity to prove to the court that we are an actively maintained cemetery," Rose said.

Deborah Ward, a DLNR spokeswoman, said the agency had not yet seen the decision and therefore could not comment.

No trial date has been set.