The Hokianga Bowling Club is about to receive a windfall, courtesy of the Far North District Council.
"I got a call from the Far North District Council telling me that the club had a $22,000 refund coming, having finally agreed with us that the land the club leases is non-rateable," club president Rob Pink said."
Paying the rates had been difficult - members had spent many hours every year raising the money needed - and the refund would give the club's rebuilding project a major boost, he said.
Kaikohe man Mike Edmonds, founder of the Kaikohe-Hokianga Community Justice Project, had made the club aware of the situation in 2014, but Mr Pink said the first time he had enquired the council sent two people to tell him he was wrong, and that if he wanted to fight it in court it would cost much more than the rates.
"I talked to Mike again in October last year, and he offered to walk us through the process, but even then it wasn't straightforward," he added.
"The council gave us incorrect information, then simply stopped replying to our correspondence. Mike encouraged us to persevere. I am glad the club took his advice; the result is enormous for us."
Kaikohe Rugby Football and Sports Club vice-president John Cowan told a similar story from 2014.
"It was a long process. I recall it took six months, but the club got its rates back in the end," he said.
Mr Edmonds said other clubs would almost certainly be in the same situation, potentially representing a million-dollar error on the council's part.
"I brought this issue to the attention of the council some time ago. They wrote back to me saying that they had studied it and there were no other cases. I asked for a copy of the study and they said they destroyed it after they read it. Now we have the bowling club, and there are other cases that I know about," he added.
Far North District Council general manager corporate services, Roger Taylor, said the council accepted its rates assessments for the club since 2002 were invalid, and would be refunded.
"This situation resulted from changes to the Rating Powers Act," he said.
Historically, if part of a property was leased, the lessee was liable for the payment of rates, but in 2002 Parliament changed the law to specify that a rating unit could not be split.
That meant if part or parts of a property were leased, the owner of the property, in this case the council, was liable for all rates.
The council should have examined all its leases to determine whether the council should pay the rates, then require reimbursement, rather than issuing rate demands.
"I regret and apologise for council's failure to put the proper process in place, and for taking so long to rectify this omission," Mr Taylor said.
"This is not how the current management team intends to operate, and we have started the task of reviewing our leases. If we find that rates have been improperly charged we will arrange for the amounts paid to be refunded."
The council would not know the cost of any errors until it had examined all its leases, a process that would not be quick or simple. It had hundreds of leases with community and sporting clubs, some pre-dating local body amalgamation in 1989.
"We are still investigating how best to tackle this," he said.
"We also wish to point out that this issue only arises when a sports or community group occupies part of a rating unit. Where a club occupies an entire rating unit, they are, and have always been, liable for rates."