Malek Fahd Islamic School students face ‘disadvantages’ after $11m court loss to Education Minister
Malek Fahd Islamic School’s bid to avoid repaying $11m of public funding has failed. Its chairman says despite the result it will be “school as usual”. The court judgment suggests otherwise.
Education
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A fresh legal bid by western Sydney’s Malek Fahd Islamic School to stop the NSW government reclaiming $11 million in public funding has failed, despite it warning the Education Minister there would be “disadvantages for current students … by a recovery of that size”.
Malek Fahd, which has 2900 students, sought a Supreme Court judicial review of the government’s decision to recoup “financial assistance” received in 2014 and 2015, arguing Macquarie Street’s move was “infected with jurisdictional error”.
The government’s decision to recall the funding was made after an investigation found the school was non-compliant with the Education Act because it operated “for profit” in those years by making more than $4m in “overpayments” to the Australian Federation of Islamic Councils, which controlled Malek Fahd at that time.
The school presented five grounds to the court but a 25,000-word judgment seen by The Daily Telegraph said none was established.
Malek Fahd was ordered to pay the government’s legal costs.
In a statement, school board chairman Fayez Moussa told The Telegraph it “was considering both the Supreme Court decision and its options.
“As far as students, staff and parents are concerned, it continues to be ‘school as usual’,” he added.
However, the court judgment suggests otherwise.
It reveals the school wrote to the government in 2020 arguing “in great detail, the disadvantages to the current students of the school, which would be occasioned by a recovery of that size (or any recovery at all).”
The government began investigating Malek Fahd in 2016.
In June 2017, the Non-Government Schools Not-For-Profit Advisory Committee determined the school had operated for profit and recommended the government make a “noncompliance” declaration.
Malek Fahd then unsuccessfully challenged the committee’s finding in the NSW Civil and Administrative Tribunal.
In February 2020, NCAT’s appeal panel also confirmed the recommendation made to the government.
There was then a series of testy correspondence between the school and Education Minister Sarah Mitchell, which are referred to in the new Supreme Court judgment.
In a November 2020 letter, Ms Mitchell said the school was still seeking “to question the advisory committee’s for-profit findings and take issue with the seriousness of the activities occurring at the school in 2014 and 2015.
“The recommendation of the advisory committee that the school be declared a noncompliance school on the basis that it operated for-profit in the years 2014 and 2015 was upheld by NCAT and was undisturbed on appeal. The findings supporting the recommendations were largely affirmed. NCAT also found that the school’s breaches in 2014 and 2015 were not of a ‘minor nature’. It is not now open to the school to make submissions challenging those findings.”
Malek Fahd wrote back saying that of the $11.07m received, it had “accounted for and/or justified all amounts spent in those years except for the sum of $43,580”. It also said the Minister had discretion to decide whether money would be recovered and if so, how much.
In March last year, Ms Mitchell replied saying she had decided “to seek recovery of all the financial assistance paid”.
It was that decision which Malek Fahd challenged in the latest Supreme Court proceedings.
The school’s most recent financial statements say the financial assistance will be recovered “via a reduction in state government funding over a five-year period.
“The reduction in funding began during 2021,” the statements say.
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