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A Chinese landlord is demanding a luxury island resort reopen immediately in defiance of coronavirus restrictions, or face massive financial penalties.

Lizard Island on the Great Barrier Reef shut down its $2,000 to $5,000-a-night resort on March 29 as travel bans and business closure orders came into effect across Australia.

One of Australia's most famous five-star resorts, the paradise hideaway northeast of Cairns is popular with celebrities and rich holidaymakers - none of whom can now even get to the island.

Lizard Island on the Great Barrier Reef shut down its $2,000 to $5,000-a-night resort on March 29 as travel bans and business closure orders came into effect across Australia

Despite the resort having no guests and not legally being able to operate, the island's leaseholder insisted it should have stayed open, government orders be damned

One of Australia's most famous five-star resorts, the paradise hideaway northeast of Cairns is popular with celebrities like Mark Ruffalo (pictured left snorkeling of Lizard Island with his son) and rich holidaymakers

The island's beaches are empty and the resort has no guests since it closed almost two months ago

Despite the resort having no guests and not legally being able to operate, the island's leaseholder insisted it should have stayed open, government orders be damned.

In an extraordinary email from its lawyers, SEA Holdings accused operator Delaware North of breaching its $2 million-a-year lease and threatened legal action if it did not reopen.

'Your client has breached clause 4.5 of the sublease by closing the Lizard Island resort without our client's consent,' the April 23 ultimatum read, according to The Australian. 

'Our client does not consent to your client's closure of the Lizard Island resort. Please confirm that your client will reopen the Lizard Island resort without delay and that it will comply with its obligations under the sublease in full, including payment of rent.'

The spectacular Great Barrier Reef is a big drawcard for the island, where guests can take tours of the reef in glass-bottomed boats

Two friends enjoy glasses of wine on one of the island's many pristine beaches a short stroll from the resort

Lizard Island announced on March 29 it would be closed until July 1 'to ensure the health of our guests and staff'

The dispute began soon after when Delaware North sought rent relief like thousands of other Australian businesses suddenly haemorrhaging cash with no income

SEA Holdings, through law firm Clifford Chance, argued Delaware North was liable for all losses and expenses suffered as a result of the resort's closure.

The Hong Kong-based, Chinese owned group secured the primary lease on Lizard Island from the Queensland Government for just $16 million in 1997 and subleases to Delaware North for $2 million a year.

The resort was obliterated by Cyclone Yasi in 2011 and rebuilding efforts were hampered by two more cyclones in 2014 and 2015 before the $45 million rebuild opened in November 2015.

Lizard Island announced on March 29 it would be closed until July 1 'to ensure the health of our guests and staff'. 

The dispute began soon after when Delaware North sought rent relief like thousands of other Australian businesses suddenly haemorrhaging cash with no income.

SEA Holdings retorted that were no 'lawful directives' demanding hotels close their doors during the pandemic - despite there being no way for guests to actually get there.

The resort was obliterated by Cyclone Yasi in 2011 and rebuilding efforts were hampered by two more cyclones in 2014 and 2015 before the $45 million rebuild opened in November 2015

One of the bedrooms in the luxury resort where accommodation costs $2,000 to $5,000 a night

Tourists swim with a turtle hanging out in the shallows off Lizard Island

Lizard Island resort features stunning private beaches, coral reefs, luxurious spas, 40 luxurious suites and villas, and upmarket bars and restaurants 

Clifford Chance in the April 23 letter refused to accept that social distancing guidelines made the one-hour flight from Cairns impossible.

The law firm argued guests could be flown in by seaplane one-by-one or in family groups by sea plane, or via boat. 

This was during the government-imposed lockdown where Queenslanders couldn't even leave their homes, let alone take luxury island holidays.

The Queensland Government is reportedly examining SEA Holdings' leave to put pressure on it to resolve the dispute amicably.

Lizard Island resort features stunning private beaches, coral reefs, luxurious spas, 40 luxurious suites and villas, and upmarket bars and restaurants.

The island really is an escape with zero mobile phone coverage and children under nine banned.

The island really is an escape with zero mobile phone coverage and children under nine banned