A protracted legal stoush between Kaipara District Council and a group of angry ratepayers has landed in the highest court of the country.

Angry Mangawhai ratepayers have decided on a final tilt at the Supreme Court after they fought unsuccessfully through the High Court and the Court of Appeal to have the Kaipara Validation Act overturned.

The Validation Act is a law validating irregularities in the setting and assessing of Kaipara District rates from the 2006-07 financial year to 2011-12 in respect of the Mangawhai EcoCare scheme. It was passed by Parliament retrospectively.

Papers were filed in the Supreme Court this week by the Mangawhai Residents and Ratepayers' Association seeking leave to appeal an earlier judgment of the Court of Appeal. In its appeal papers, the association said the Court of Appeal failed to distinguish between the voluntary contractual relationship between a lender and a local authority and the relationship imposed by statute between a local authority and its ratepayers.

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It said the council's borrowing to fund the wastewater scheme was illegal and contrary to the Local Government (Rating) Act 2002 (LGRA) which could only be exercised pursuant to a specific legislative power. The Court of Appeal's decision, the association argues, overrides the requirements of the Local Government Act (LGA) and the general law.

"The Court of Appeal's decision has removed the obligation on a local authority to comply with the LGA, LGRA, and general law when rating to fund borrowing, therefore encouraging laxity in compliance with the law."

The association said rates unlawfully set and assessed in relation to the illegal borrowings, and the failure to consult ratepayers, were not explicitly identified and validated. It submitted the Supreme Court should grant leave because the appeal involved a matter of general or public importance.

The Court of Appeal's decision would guide future conduct of local authorities, lenders, and ratepayers, and that its effects meant a local authority did not have to comply with statutory requirements.

"It is important to clarify the correct approach to interpretation of retrospective legislation because it removes a citizen's right to effective judicial review," the association said.