The paddle steamer City of Dunedin left Wellington at around 5 p.m. on Saturday 20 May, bound for Nelson and then Hokitika. It was never heard from again, and no trace was ever found of Captain James Parker Boyd or his 24 crew and at least 22 passengers.
As darkness approached, Miss McMenamen (at the time reported as 'McNamara') of Terawhiti Station saw a steamer near the rocks off Cape Terawhiti, the south-western tip of the North Island. The ship appeared to be ‘going round and round and would not steer’. When she got home she asked her mother to go and see what was happening, but she was ‘too busy’.
This was the last reported sighting of the ship. Wreckage was found the following day on the south coast, and confirmation that it was the City of Dunedin that had been lost came when the ship’s figurehead washed up on the beach at Palliser Bay.
It is likely the City of Dunedin went down near Karori Rock, off Terawhiti.