Up to $1 million sent to the Kaipara District Council (KDC) to settle rates arrears has been refused and will be returned to ratepayers.

The Mangawhai Ratepayers and Residents Association sent cheques totalling $550,000 to the council on Wednesday to cover arrears after a long rates strike over payments related to the controversial Mangawhai sewerage scheme.

At the same time as the cheques were handed over some association members also paid their rates arrears individually to the council and association chairman Bruce Rogan estimated the council was offered a total of around $1 million.

But the three commissioners administering the Kaipara district have rejected the payments because the money was offered on the basis that all rates penalties would be cancelled.


Chairman of commissioners John Robertson said yesterday the payments would be returned with a note explaining they couldn't be accepted with conditions attached.

The KDC applies two types of rates penalties. A 10 per cent "instalment" penalty is applied if landowners fail to make quarterly rates payments on time. "Further" 10 per cent penalties are placed on overdue rates accounts every six months.

Mr Robertson said "further" penalties were cancelled if landowners brought their rates accounts up to date by June 30 this year.

"The High Court was clear the validated rates were payable. We expect people waiting for the court decision to accept they have to pay their rates."

A total $4 million owed in KDC rates arrears on June 30 included up to $2 million on Maori land and other arrears not associated with the rates strike.

Told of Mr Robertson's response, Mr Rogan said the commissioners had turned down a goodwill gesture by ratepayers opposed to the unjust imposition of penalties on rates that were acknowledged to be illegal for years until retrospectively validated by Parliament.

"If the commissioners remitted all the penalties many ratepayers would pay their historical rates and the tension between the ratepayers and the council would be markedly eased," he said.

The Mangawhai association is preparing submissions for a case it is bringing to the Court of Appeal to decide whether councils can set and assess rates to recover illegal debts.


Mr Rogan said a date had not yet been set for the hearing but the association was hoping it would be before the end of the year.