Haileybury sues firm that advised it on Kormilda takeover, claiming resulting ‘loss and damage’

Elite Melbourne private school Haileybury has launched legal action to recoup the ‘loss and damage’ it says it has suffered from its takeover of Darwin’s troubled Kormilda College.

Haileybury Rendall School opened in Darwin in 2018.

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ELITE Melbourne private school Haileybury has launched legal action to recoup the “loss and damage” it says it has suffered from its takeover of Darwin’s troubled Kormilda College.

Haileybury is suing KPMG in the Supreme Court, claiming the advisory firm failed to properly warn it of the “anticipated financial implications” and cost to the school of acquiring Kormilda.

In a writ filed with the court, Haileybury says it was approached by the NT Education Department and Kormilda’s Anglican and Uniting Church owners with an acquisition proposal in early 2017.

It says Haileybury then engaged KPMG to assist the school “to build a six-year financial model and to quantify the anticipated financial implications” of the takeover.

Haileybury says it relied on KPMG’s subsequent report in its decision to acquire the struggling school and alleges the firm failed in its duty of care by providing bad advice on the deal.

“KPMG owed a duty of care to Haileybury to exercise reasonable care to the standard of a professional accountant in and about the preparation of the financial model and the report,” the writ reads.

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“KPMG breached its duty of care owed to Haileybury by, amongst other matters, failing to … correctly quantify the anticipated financial implications of Haileybury assuming ownership of the (school).

“And (failing to) correctly advise Haileybury of the costs of acquiring the (school) or for the purpose of determining and negotiating the funding to be provided by the Territory to Haileybury under the funding agreement.

“By reason of the breaches referred to above, Haileybury has suffered loss and damage.”

Haileybury alleges KPMG also failed to “correctly ascertain the funding to be provided by the Commonwealth and the Territory under the Commonwealth funding model”.

The writ alleges representations by KPMG that it had accurately forecast the financial implications of the takeover in its report were “misleading and deceptive”.

The legal action comes after the NT Government stepped in with a $5m bailout for Kormilda in 2016 when it was in danger of being forced to close its doors before the end of that school year.

The school’s funding for the 2017 year was then guaranteed by the Federal Government before Haileybury took over in 2018.

Its principal, Craig Glass, left the job in December after successfully growing enrolments from 250 to 770 in three years.

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“When I arrived, morale was low because most people had left because they didn’t know if the school had a future,” he said.

“We had three goals — academic excellence, high expectations and building community — and I think we’ve been pretty successful in those.”

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