And Councillors also approved a secondary motion put by Cr Jamie Cregan not to seek legal costs from any ratepayers who seek to challenge their invoices in court should they lose that case.

Around 80 angry ratepayers waited outside Council Chambers for 40 minutes on Wednesday night for a planning meeting to finish before filling the gallery for what became a passionate and heated debate on the ongoing rates saga.

Mayor Overall kicked things off with a list of prohibited behaviours under the meeting code of conduct- no booing, hissing, insults, applause.

"It's all about respecting and listening to one another in a polite manner," Cr Overall told the crowd.

Next came thirteen separate presentations to Councillors from affected ratepayers, including representatives from the not-for-profit mental health residence HOME, which received a retrospective rates bill for $23,000 this week.

HOME board member Father Peter Day told the meeting that the decision to issue backdated invoices for undercharged water, sewer and waste access charges was "disturbing."

"HOME is the first of its kind in Australia, which says a lot of this community and its willingness to deal with the vexed issue of mental health.

"What has been done may be legally viable, but it's on shaky ground ethically and morally," he said.

Next followed a long explanation from general manager Gary Chapman on how the backdated charges had come to be issued following an audit of Council's rates records.

Mr Chapman said Council legally had no choice but to issue the invoices, many of which run into the tens of thousands of dollars.

"The Council does not have the ability to not issue the rates and charges under the local government act; that's what makes this so difficulty for the Council," Mr Chapman said. "Staff are simply acting in accordance with the law."

The meeting then turned to the matter at hand, with councillors Brian Brown and Kenrick Winchester angrily speaking out against the financial hardship caused to small businesses and community groups as a result of the rates being issued.

Cr Winchester said he was "deeply embarrassed" by the difficulty caused to ratepayers, while Cr Brown labelled the situation a "bloody mess."

"I believe it's greatly unfair ... and an outrageous impost on our ratepayers, many of who are stalwarts of the community," he said.

However Cr Toni McLennan noted all councillors were in favour of the motion to put the invoices on hold and seek assistance from the NSW Government, and defended the Council staff involved in the rates audit and subsequent issuing of invoices.

"The people in Council that I know are just as concerned about this as the community are," she said. "The Council is not an evil entity here to ruin your lives."

Councillors unanimously approved Cr Overall's initial motion, and also supported another two: Cr Cregan's motion not to seek legal costs from any ratepayers who unsuccessfully challenge the notices, and a foreshadowed motion from Cr Sue Whelan to set up an advisory committee to review any future Council policies regarding rates.