The Northland Regional Council will be forced to raise more than $99 million if it has to refund rates and penalties collected from all ratepayers over six years.

Although the High Court has ruled NRC rates for 2011 to 2016 collected by the Kaipara District Council were not lawfully set or assessed, it did not have powers in judicial review proceedings to direct money already paid be refunded.

The Whangarei District Council and the Far North District Council said yesterday they would wait to hear from NRC on any rates refund.

Questions sent to NRC chairman Bill Shepherd in relation to the ruling remained unanswered at edition time.

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The total amount collected on behalf of the NRC from the three councils between July 1, 2011, and June 2016 was $99.5 million.

Late last year, NRC chief executive Malcolm Nicholson gave the court a breakdown of rates and said, if all ratepayers in the region were refunded, property owners in Whangarei would receive $51.3 million, Far North $33.7 million, and Kaipara $14.4 million.

"I think it is highly likely that the council would set a new rate to raise the amounts required to be refunded plus processing costs before making the refund," he said in his affidavit to court.

A bank loan or selling assets are among other options NRC has to fund the refund. NRC's services rate - which makes up about 40 per cent of the NRC rates - would have to be increased by about 238 per cent to fund the processing costs, he said.

A law expert on local government, Julie Hardaker, said the case showed councils needed to be absolutely vigilant in how they applied the Rating Act.

The lawyer at Chen Palmer who served two terms as mayor of Hamilton said while there was ambiguity around the wording of the act, at the end of the day councils' power to
levy rates was important.

"Their rates' notice should give clarity around what the rates are for, for what period, and when are instalments due because councils do have powers to charge penalties or seize properties on unpaid rates," Ms Hardaker said.

She said Local Government New Zealand should look very carefully at the judgment and reinforce to councils to comply with the Rating Act. The prospect of getting a refund through court intervention by aggrieved ratepayers who have already paid their rates was not easy though.

"It will depend on what case the ratepayers put before the court. It will be a fine balance and factors like the ability of the regional council to provide services if an order for refund is made will come into consideration," she said.

New Zealand Taxpayers' Union executive director, Jordan Williams, said the High Court decision should send a message to local councils across the country that they need to stop being fast and loose with the Rating Act.

"Council's ability to tax is a special privilege, and at minimum heads should have rolled at the council for this error."

Kaipara mayor Greg Gent said until NRC decided on whether to appeal the High Court judgment, the Kaipara District Council was not in a position to comment.

Local Government New Zealand said it has further analysis to do on the judgment and would assess the implications, if any, for other councils.

"Regardless, this case has highlighted that the legislation could be far clearer and we look forward to working with government officials to improve the clarity of the legislation," a spokesman said.