Bruce and Heather Rogan, Mangawhai residents who stopped paying rates they believed were unlawfully set, have lost an appeal against the Kaipara District Council.
The couple were part of a group of about 100 who refused to pay rates after the council hit residents with 40 per cent rates rises when it secretly ran up $58 million in debt for a sewage treatment system.
Despite a victory in the High Court in 2016 when it was ruled the rates were invalid, the Court of Appeal concluded the Rogans were still not legally allowed to withhold rates.
"The question that arises on this appeal is whether a ratepayer is entitled to withhold payment of rates where a rates assessment or rates invoice does not contain or accurately record all the specified information," Justices Stephen Kos, Raynor Asher and Murray Gilbert said in the judgment.
"For the reasons set out in this judgment, we agree with the conclusion reached in each of the courts below that the answer is 'no'."
The judges ruled that section 60 of the Local Government (Rating) Act 2002 meant the couple were not entitled to withhold rates:
"A person must not refuse to pay rates on the ground that the rates are invalid unless the person brings proceedings in the High Court to challenge the validity of the rates on the ground that the local authority is not empowered to set or assess the rates on the particular rating unit."
The judges said section 60 "provides that a person cannot refuse to pay rates on the ground that the rates are invalid unless he or she makes good on the objection by bringing judicial review proceedings in the High Court.
"Even then, he or she must not refuse to pay the rates unless the challenge is based on the contention that the local authority is not empowered to set or assess the rates on the particular rating unit. This could be where, for example, the rating unit is outside the local authority's territorial boundary."
The Rogans have since repaid the three years' rates owed from 2012 to 2015 but have not paid penalties.
"The Rogans were not entitled to refuse payment of the rates because of the asserted errors and omissions in the rates assessments and rates invoices," the judgment read.
"The sections we have referred to show a statutory obligation to pay irrespective of whether there are errors or omissions in the rates assessment or the rates invoice of the type complained of in this case."
The former council resigned in 2012 and was temporarily replaced by commissioners.
The Council has since been appointed a Crown manager to support the new Kaipara District Council.
"It is a shame that this process has cost the Rogans and the ratepayers of the Kaipara District so much over such a long period of time - especially given the important role that the Rogan's played as whistle-blowers on the historic failures of the Council," Crown manager Peter Winder said.
"This latest ruling is important and sets a clear precedent for those few ratepayers who still have outstanding rates from period prior to and during the term of the Kaipara Commissioners.
"Given this decision, I hope that that can be resolved without further recourse to the Courts."
Mayor Dr Jason Smith said "looking forward to having this story at an end, so that we can all get on with the job of growing Kaipara's bright future together".