The chairman of commissioners running the council, John Robertson, said banks of some defaulting ratepayers that had mortgages on properties had paid outstanding rates after selling off assets.
About 100 of the Kaipara's 14,000 ratepayers, including association chairman Bruce Rogan, are still refusing to pay and are awaiting a ruling from the Court of Appeal on the rates' validity. The court will hear the appeal in August.
Mr Robertson said one of the 100 defaulting ratepayers owed more than $100,000 while others had to pay five-figure sums.
The council is seeking $14,946 from Mr Rogan but he is staying put.
"It's totally unprecedented in the history of New Zealand that a council has become so offside with its ratepayers that it has started suing them through court. They are so desperate for money they have to keep penalties levied for unpaid rates to keep their disastrous ship afloat," he said.
Mr Rogan said Mr Robertson and his fellow commissioner had never agreed to discuss and reach a compromise with the ratepayers.
But Mr Robertson said the defaulters were warned repeatedly about the consequences.
"The legal action is no different to people being taken to court by businesses to recover their debt."
He insisted the High Court had ruled rates were valid for all purposes, including penalties, therefore must be paid.
On Mr Rogan's stance, he said: "We've gone out of our way to try and engage with him but he's decided to continue the MRRA's action through the Court of Appeal, despite the High Court ruling ... We've had meetings for months to encourage ratepayers to pay up."
In August last year, the association sent cheques totalling $550,000 to the council to cover arrears but they were returned. The three commissioners administering the Kaipara district rejected the payments because the money was offered on the basis that all rates penalties would be cancelled.
