Land above that spectacular coastline is used for many purposes including farming, horticulture, grape growing for the Spencers' award-winning Man O'War Vineyards and olives.
High Court Justice Pamela Andrews is hearing Man O'War's appeal against the 2013 Environment Court ruling on the land.
Federated Farmers is supporting Man O'War and the Environmental Defence Society supports the council.
Man O'War has not disputed that its holdings include outstanding natural landscapes, but is challenging the extent of that classification. Disputed areas are at the eastern end of Waiheke and parts of Ponui Island.
The Environment Court partly upheld the council's position on the extent of the outstanding natural landscape zoning, but reduced the size of areas so classified.
Man O'War's appeal to the High Court claims the Environment Court made errors of law in reaching its decision.
It argues the Environment Court did not take into account possible future modification of outstanding natural landscape property with activities such as pastoral farming and horticulture - all permitted activities in the district plan.
The outstanding landscape classification would unreasonably stop Man O'War establishing or expanding activities on its land, it argues.
The council's case is that the Environment Court applied the right test in deciding which land was outstanding natural landscape.
If the district plan permits activities that adversely affect outstanding natural landscapes, the council says the answer is to change the district plan, not the landscape classification.
