Australia’s largest Muslim school could close after it lost a Federal Court fight to keep $19 million a year in taxpayer funds.
The Malek Fahd Islamic School on Tuesday lost a crucial legal battle to keep its federal subsidies after appealing an earlier decision by the Administrative Appeals Tribunal.
The tribunal found the school, which operates three campuses across Sydney’s southwest, was being run for profit in breach of education funding laws.
The court battle hinged on lease arrangements at the school’s Greenacre campus.
The school properties had been owned by the Australian Federation of Islamic Councils, which improperly used inflated rents and other charges to make money from the school.
A new school board was installed in 2016 and took steps to terminate a range of inappropriate arrangements AFIC had saddled it with.
One problem the board could not immediately solve was the lease of its Greenacre campus.
Justice Nye Perram said the rent payable to AFIC ‘exceeded a fair market rent’, in a decision published on Tuesday.
‘The applicant could not simply terminate the lease, however improperly it had been procured by AFIC, because it continued to need the Greenacre premises to conduct the school,’ he said.
The judge said the school ‘did its best’ to stop paying rent to AFIC but the lease remained and rent continued to accrue.
He found the appeal must be dismissed with costs.
‘I have found there to be no error of law discernible in the tribunal’s reasons and making a finding that future rent owed by the applicant to AFIC in relation to Greenacre will be at a market rate would be inconsistent with findings made by the tribunal,’ Justice Perram said.
‘The appropriate course is for the applicant to make a fresh application to the minister.’
Justice Debra Mortimer found there were ‘errors of law’ in the tribunal’s construction and application of the relevant act, indicating she would set aside its decision and allow an appeal.
But Justice Michael Wigney agreed with Justice Perram that the appeal must be dismissed.
Responding to the decision, Education Minister Simon Birmingham said the federal government would not tolerate the misuse of taxpayer funding for schools.
‘I urge Malek Fahd’s management to clearly outline their plans to give their school community certainty for the future,’ he said in a statement.
AFIC, which collects halal certification fees from Vegemite’s parent company Bega Cheese, was found to have siphoned about $45 million from the school since the Sunni Muslim umbrella organisation founded the school in 1989.
It had received $19 million a year from taxpayers until the Administrative Appeals Tribunal ruled in 2016 the funds should be withheld over financial irregularities.
The Malek Fahd school’s graduates include the leaders of Islamist extremist group Hizb ut-Tahrir Australia, Uthman Badar and Hamzah Qureshi.
Daily Mail Australia last year captured Mr Badar on camera telling a forum at Bankstown library that ex-Muslims deserved death. – Mailonline
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