27 March 2023

Brindabella Christian College's 'mounting' tax office debt revealed in tribunal appeals hearing

| Claire Fenwicke
Community for Constitutional Reform at Brindabella Christian College reps

Adero Law’s Rory Markham and Elizma Nell with Community for Constitutional Reform at Brindabella Christian College’s Jodie Jayatilaka, David Stephens and Joel Deans at the AAT on Monday (27 March). Photo: Claire Fenwicke.

It’s been revealed Brindabella Christian College owes the Australian Taxation Office (ATO) almost $5 million as legal proceedings kicked off on Monday (27 March) at the Administrative Appeals Tribunal (AAT).

A previous ruling in 2021 found Brindabella Christian Education Limited (BCEL) wasn’t a “fit and proper person” to manage the school under the Australian Education Act 2013, following an investigation by a Federal Education Department delegate.

This imposed several conditions on the BCEL, ordering that it disclose audited statements and related party transactions and engage an independent professional to review its financial affairs.

The BCEL has appealed this finding.

In opening submissions, Federal Education Minister legal representative James Emmett said there were concerns about whether the BCEL was a “fit and proper person to receive Commonwealth funds” under the Australian Education Act 2013.

He submitted that while they weren’t necessarily concerned about the BCEL’s financial viability, there were concerns over the school’s “financial position” at “points in the past”, which was relevant.

“The Minister says that on the school’s own evidence, it’s clear the school hasn’t been fit and proper in the past,” Mr Emmett said.

He argued this gave rise to two questions: the extent to which this had now been addressed by management and the extent to which the community could be confident the issue wouldn’t occur again in the future.

His submission revealed a payment plan for the school had been created with the ATO on 19 January 2022, when its debts were just over $3 million.

“Evidence will show the payment plan was only complied with up until May 2022,” Mr Emmett said.

A further review by the ATO into the school’s debts in October 2022 recalculated the money owed to $4.2 million.

“There’s evidence of some payments since then, although the latest evidence which came last Friday [24 March] … [it appears] the ATO debt is $4.8 million,” Mr Emmett submitted.

“It’s mounting.”

He also noted the Minister had “real concerns” about the reliability of information put forward by the school regarding how it had tried to rectify its “flaws and problems” identified in various audits.

Overall, Mr Emmett submitted it would be clear “beyond argument” to the Tribunal that the BCEL was not fit to run the school for the purpose of receiving Commonwealth grants from “2019 to at least 2022”.

Mr Emmett hoped the Tribunal would rule for a governance and financial review of the school, as he argued this would “be an important step in giving the community confidence” in its running.

“There is a live question of what’s been done to date … [and conditions imposed in the previous ruling] dovetail neatly with the current state of affairs,” he said.

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In response, Tom Brennan SC for BCEL argued there was a difference between finding a person fit and proper and finding an organisation fit and proper.

“The test here is being asked … in the context of a scheme of Commonwealth funding, not a scheme of authorising a person to undertake regulatory activity,” he submitted.

“Regulatory running of the school is a matter for the states and territories.”

Mr Brennan argued the conditions imposed by the Federal Education Minister were “quite inappropriate”, and there was enough evidence to show that what was being done by the school to rectify issues would leave the court in a “relatively comfortable state”.

He submitted the original Federal Education Department delegate, whose examination led to an audit by Bell Chambers Barrett was, in fact, not a delegate at all but an authorised body, and so was “pretending to have powers he didn’t have”.

Mr Brennan made allegations there had been an “abuse of process” and accused the Commonwealth representative of “egregious cowboy behaviour” when dealing with the school board over funding arrangements.

He submitted funding arrangements were changed without proper notice by the representative as a decision to “display his manhood”.

“[Your Honour] you will be most uncomfortable as to what has gone on with this regulator and whether there has been a coordinated attempt to hide key steps leading to the findings,” Mr Brennan submitted.

He also accused the Education Department of “unarguably” breaching confidence when the full Bell Chambers Barrett report was handed over to the ACT Education Directorate, the ACT Human Rights Commission and the ACT Charities and Not-For-Profit Commission, as well as a redacted version to the ACT Block Grants Authority.

“It speaks of a desire to do harm to the applicant [my client],” Mr Brennan submitted.

He called on the Tribunal to reject the Bell Chambers Barrett report in its entirety and remove the imposed conditions on the school.

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Senior Member Damien O’Donovan told both parties he didn’t want to spend hours exploring issues that wouldn’t be used in his judgement.

“I’m not going to treat this as a Royal Commission into what happened procedurally,” he said.

School board chair Greg Zwajgenberg was present at the hearing and was approached by Region for comment, but he declined.

Hearings are expected to last the week, with Mr Brennan to continue his opening statement tomorrow.

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