Mobil sought to strike out the claim on the grounds the court did not know the extent of the contamination, how it may be remedied and what account should be taken of Waterfront Auckland's intended use of the land.
Justice Miller said the material before him suggested Waterfront Auckland wanted the land fit for residential use.
John Dalzell, of Waterfront Auckland, said a declaration was being sought for the blocks which are between Pakenham St West and Madden St, and off Beaumont St.
"Waterfront Auckland is attempting to seek clarification, in the interests of both parties, of the lease agreement with Mobil. Specifically, it is seeking clarification of the scope of Mobil's obligation to remediate the site at the end of its lease.
"Remediation and decontamination of the sites needs to be done prior to or during development of the land. Waterfront Auckland has reached agreement with other petroleum companies who held leases in the area, regarding their remediation obligations.
"If Mobil is not obliged to remediate the site it has leased for approximately 90 years, the remediation bill - currently estimated at $40 million to $50 million - would fall to the Auckland ratepayer," Mr Dalzell said.
Mobil and predecessor companies had occupied the tank storage site on the land since the 1920s.
Mr Dalzell said during that time, the land was contaminated with petroleum and chemical products including known carcinogens, petroleum hydrocarbons, volatile organic compounds and semi-volatile organic compounds.
"Mobil's lease requires the company to keep the land in good order and deliver it up in good condition when it vacates the land. Mobil's leases came to an end at the end of last year and Mobil has now vacated the site.
Waterfront Auckland maintains Mobil is required to fully remediate the land, apart from gasworks contaminants from the original reclamation.
