Almost $280,000 of school fees paid in advance to Mowbray College by parents of former students of the failed school will not be returned directly to the families and will instead be used to pay the general costs of the liquidation, after a Supreme Court judgment on Wednesday.
In the latest court action over the fall of the college, the court heard school staff tried to quarantine a bulk sum of the pre-paid fees in March 2012, by transferring them from a heavily overdrawn NAB account used by the school for day-to-day expenses, into another account with the Commonwealth Bank.
The intention was to separate the funds from the spiralling debt and credit amassed by the western suburbs school, but the effort was ultimately unsuccessful.
Justice Ross Robson found that while the school was in the process of establishing a trust, no such trust had been created at the time the money was transferred.
The cash will therefore be treated as any other Mowbray asset and distributed by the liquidator, Jim Downey, at first to cover costs, including the millions of dollars spent paying the Fair Entitlements Guarantee to employees.
”This will, no doubt, be disappointing for some parents,” Mr Downey said in a statement, ”but at least the matter has been clarified once and for all.”
The school of 1200 students and 200 staff across three campuses collapsed in June 2012, crippled by debt reaching $28 million. Since then, the Supreme Court has heard it may have been insolvent as early as 2007.
