DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Ms Amy Leigh Ferguson (nee Thomson)
Kevin Robert Ferguson
Jennifer Margaret Thomson
v
Kimberley College Ltd T/A Kimberley College
(U2018/6775; U2018/6777; U2018/6778)

Application for an unfair dismissal remedy – Three separate applications for unfair dismissal remedy heard together –Serious allegations involving a wide range of fraudulent financial transactions – Alleged breaches of duty under Corporations Act and Australian Education Act - Failure to remit SGC payments resulting in Director Penalty Notices – Failure to assess, record and lodge FBT returns – Valid Reason for termination – Applications dismissed.

[1] These matters concern three separate applications under s.394 of the Fair Work Act 2009 (the Act) by Ms Amy Ferguson, Mr Kevin Ferguson and Mrs Jennifer Thomson (the Applicants) who allege that the termination of their employment with Kimberley College Ltd T/A Kimberley College (Kimberley College) (the Respondent) was unfair.

[2] Kimberley College is an independent non-State school, established as a registered, unlisted company limited by guarantee. 1 Kimberley College is registered as a charity with the Australian Charities and not-for-profits Commission, and therefore has the accompanying GST and tax benefits of such.2 The College has approximately 900 enrolled students, overseen by a staff of approximately 72 teaching and non-teaching employees.3

[3] Kimberley College’s Board comprised four volunteer Directors, and Members of the company. Historically, the Board had little involvement in the management of day-to-day matters; management decisions were made by the Principal, who at the relevant times was Mr Paul Thomson, and “other key managers” (his family members, including the Applicants). 4

[4] Mr Thomson was the Principal of Kimberley College until 12 June 2018, and employed the Applicants as follows:

•  Mrs Thomson (“married to Paul Thomson; mother of Amy Ferguson”) 5 in 2001 as Personal Assistant to the Principal;

•  Ms Ferguson (Mr and Mrs Thomson’s daughter) in 2001 as Chief Financial Officer (CFO); and

•  Mr Ferguson (married to Ms Ferguson) in 2011 as the business manager. 6

[5] Mr Thomson also employed his two daughters, and his daughter’s de-facto partner at Kimberley College. 7 Mr Thomson was dismissed at the same time as the three Applicants in the matters before the Commission.

[6] Prior to issuing show cause letters to the three Applicants on 1 June 2018, a report from GT Advisory and Consulting (GT), a specialist advisory firm that focuses on the area of insolvency, restructuring and forensic accounting, was provided to the Board. I have set out in detail immediately below a summary of matters contained in the GT Advisory Report which became the basis for the allegations in the show cause letters sent to the three Applicants. The summary details the allegations each Applicant was facing prior to their terminations.

“Second Interim GT Advisory Report Summary

Superannuation Guarantee Charge (“SGC”) Liabilities and Director Penalty Notices (“DPN”)

Whilst we understand based on information we have received to date that the SGC liabilities have likely been extinguished prior to our engagement, we have only received details of the superannuation reports to assist with the objection to the Deputy Commissioner of Taxation (“DCoT”) on 30 May 2018. We note that these are partial records and as it stands, despite our repeated requests for these documents, the records received to date remain incomplete and not sufficient to lodge the objection with DCoT.

As noted previously, the SGC liabilities calculated by the DCoT are estimated to be $2,157,475.35, as reflected in the SGC statement issued by DCoT.

Fringe Benefits Tax

The Fringe Benefits Tax (“FBT”) returns for 2016 and 2017 financial years are currently outstanding.

As part of bringing the Company’s management accounts up to date to 31 December 2017, MBA have been engaged to provide assistance in preparing the general purpose financial statements for the financial year ended 31 December 2017. As part of the engagement, we have also requested MBA assist the Company in preparing and finalising the outstanding FBT Returns. For the purposes of this report, we have requested that MBA provide a preliminary view on the estimated FBT liability owing to the DCoT for 2016.

Financial mismanagement and controls

As noted in the interim report dated 10 May 2018, there has been a concerning lack of financial controls in place, particularly relating to control of expenditure. This is relevant across all expense categories but particularly in regard to the independent approval of related party reimbursements, benefits, loans and salary increases. I also note that the lack of controls and accountability in place has also contributed to the current state of the Company’s management accounts.

As initially raised in our previous report:

- There has been no proper receivables policy in place to ensure timely and efficient collection of receivables, noting that $6,387,259.82 is currently listed as outstanding in relation to the school fees from parents, representing approximately two (2) years of parent revenue.

- There is a lack of regular bank reconciliations and an overuse of suspense accounts and unrecorded credit cards;

- There is no known delegation of authority policy which would clearly outline roles and approval limits of various key management and Board members;

- There have been limited financial controls in place over various sub-functions of the Company, namely, in relation to the tuckshop, uniform shop. Typically, these sub-functions of the Company would have an adequate point of sale system in place which the current system lacks. To complicate matters, there does not appear to be a proper accounting of sales and purchases relating to the divisions of the Company (school) which makes it difficult for the Company to be accurately reporting to statutory authorities for both Goods and Services Tax and Fringe Benefits Tax.

- There is no known record keeping policy or if there is one, it has not been adhered to as there is significant lack of resource documents available to properly reconcile and finalise the management accounts. As advised, based on the records that have been made available to the interim CFO, there are significant risks faced by the Company and Directors should the Company be audited by the ATO in relation to GST, FBT or income tax.

- There are no formal policies in place regarding the financial reporting to the Board. Prior to Board meetings, the Board would usually expect to receive at a minimum:

•  Profit and loss YTD;

•  Balance sheet YTD;

•  Summary of cash position;

•  Summary of debtor position;

•  Summary of creditor position;

•  Budgets – including performance against budgets;

•  Cash flow forecasts; and

•  Capital expenditure forecasts (short and long term)

Our final report will provide our recommendations in relation to the financial controls and financial governance measures that should be immediately put in place, in addition to those already implemented by the interim CFO, James Cook and the Board.

Findings to date

Please note that unless where it has been otherwise stated, the Board have advised our office that none of the transactions and/or expenses detailed in this section of the report were approved by the Board prior, or after, being incurred. Where we have referenced the terminology ‘unauthorised’, this refers to a transaction that has occurred that has not been authorised at Board level. We are advised that these transactions only came to the Board’s attention via the 2016 audit process, and the Board signed the 2016 accounts solely as a true representation of the financial position of the College, noting the related party transactions that were disclosed. The Board advises that it did not resolve to condone, accept or retrospectively approve and/or ratify those types of payments.

Unauthorised transactions and benefits to related parties.

Detailed below is a summary of the transactions identified to date by our office which based on advices of the Board, have not been authorised and appear to have been paid directly, or have directly and/or indirectly benefited, parties associated with Mr Paul Thomson and Mrs Amy Ferguson (nee Thomson) (collectively, the “De-facto Directors”) during the 2016 and 2017 calendar years. This summary does not include the bonus/back-pay payments made to related parties in the 2016 calendar year (which are discussed later), but do include the related party travel benefits as disclosed in the 2016 audited financials.

Please note, that the below summary and our review has been limited to the transactions that have been recorded in the management accounts to date for the calendar year ending 31 December 2017 and identified as related party benefits in the 2016 audited financials. We expect to identify further unauthorised related party transactions, both in the 2017 calendar year as well as the 2018 calendar year as the accounts are further reconciled to date.

Suspense Account: 4001

The transactions listed below detail the payments which have occurred in the Bank of Queensland Main Account (“BOQ Main Account”) which lack source documents and appear to have been paid directly to Mrs Ferguson and Mr Kevin Ferguson’s personal accounts:

(Table 1.1 in report omitted however 10 transactions between January 2017 and August 2017 amounted to $131,692.62)

Notwithstanding numerous attempts to obtain source documents to support these transfers to Mrs Ferguson and Mr Ferguson’s personal accounts, these documents have not been forthcoming, and are unable to be located in the Company’s records.

Suspense Account: 4002

The transactions listed below detail payments which have occurred in the Bank of Queensland Debit Account (“Debit Account”) which lack source documents.

Based on our enquiries with management I understand that the physical debit card linked to the Debit Account has been held by Mr Thomson’s wife, Mrs Jennifer Thomson and thus why we have included this unreconciled account in the report.

I note that the Company’s internal accountant has been bringing the accounts up to date, together with the external accountants, and have listed a number of transactions within this account which have no supporting documents. These are summarised above and as noted, these are approximately $10,410 of ATM withdrawals from the Debit Account which have not been substantiated, along with approximately $106,814 of payments made on EFTPOS and Cheque which to date, have not been substantiated.

A summary of the monthly transactions which are currently sitting in Suspense Account: 4002 which the Company does not currently have source documents for are as follows:

(Table 1.2.1 and 1.2.2 in GT Advisory Interim report omitted)

Due to not holding sufficient information to confirm the ultimate beneficiary and/or outcome of these funds, I am not currently in position to recommend these transactions be allocated to a related party loan accounts.

However lack of supporting documents supporting such significant expenditure is further reinforcement of the financial mismanagement and lack of controls and systems which have previously been in place with the Company.

Travel

2016 Travel

As disclosed in the auditors notes to the financial statements for the financial year ended 31 December 2016, Mr Thomson, Mrs Thomson, Mr Ferguson and Mrs Ferguson, along with various other family members took a six (6) week overseas holiday to Finland and the United Kingdom (“Finland/UK Trip”). The expenditure for this overseas holiday cost the Company in excess of $350,945, of which only $141,985 was considered by the auditor as employment related. The balance amount of $192,097.00 was deemed as a personal benefit to the various family members that attended the trip.

The transactions relating to the expenditure on the Finland/UK Trip are summarised below, along with the overseas trip to Spain which appears to have been taken by Mr Ferguson in July 2016.

As summarised above, in the management accounts of the Company the cost of the Finland/UK Trip was allocated to expense accounts relating to Staff Professional Development (“Staff PD”) and the Kimberley College Football Academy (“KCFA”). I also note that there was an additional overseas trip to Spain taken by Mr Ferguson on or around July 2016. Notwithstanding that Mr Ferguson may have claimed this as a legitimate Company expense for the betterment of the KCFA, this overseas trip alone appears to have cost the Company in excess of $40,000, taking the total travel costs to $391,153 for these two trips.

Our advice from the Board is that this trip and the expenditure of school funds on same was wholly unauthorised. The $192,097.00 of related party benefits that have resulted were certainly unauthorised.

Notwithstanding that I am advised that Mr Thomson may be entitled to an annual sabbatical and a portion of the Finland/UK Trip may have been related to professional development purposes, taking a significant number of family members along on this trip, the expense of which was unauthorised, appears an inappropriate use of Company funds. The cost of these unauthorised related party benefits to the Company do not only total the estimated $192,097.00 (as estimated by the auditor), there will be an additional financial consequence to the school in relation to FBT liability payable on the disclosed related party benefits. Based on the benefits disclosed in the auditor’s notes to the financial statements for the year ended 31 December 2016 (which include all disclosed related party benefits and not just travel expenses), the estimated FBT liability for the Company is $204,731. I note that this amount is likely to increase once a more detailed review of the transactions which attract FBT liabilities has been conducted.

Given these related party travel expenses were unauthorised, the Board should consider amending the financial statements for the financial year ended 31 December 2016 and apportioning the unauthorised personal benefits of $192,097.00 to the loan accounts of the relevant parties. The recommended treatment of these transactions will be further discussed later in the report.

2017/2018 Travel

Whilst the records available to us at this time do not allow us to confirm the unauthorised related party benefit portions of travel that has occurred in the 2017 and 2018 calendar years, for illustrative purposes we provide the following summary of identified unauthorised transactions which appear to have directly and/or indirectly benefited related parties and which have been incurred by the Company and expensed to the KCFA:

China: June 2017

1. On 28 June 2017, the Company paid an unauthorised payment of $60,016.00 to China Southern for flying KCFA students to compete in China. Despite our requests, no details relating to reimbursements received from students in respect of this trip have been provided by the Company’s Business Manager, Mr Ferguson, who we understand also leads the KCFA;

2. The Company made unauthorised direct payment transfers to accounts held by Mrs Ferguson and Mr Ferguson in the amount of $30,000 on 8 June 2017 and in the amount of $30,000 on 29 June 2017. The latter transaction has a handwritten note which states that the transfer of $30,000 was for Canberra and China, which we understand would relate to spending money while overseas. We also note that despite our requests for information, no source documents detailing how these transfers have been expended have been provided to our office.

Dubai: March 2018

1. From 30 March 2018 to 9 April 2018, the Company took KCFA students on an unauthorised 11-day trip to Dubai. Details of the combined costs of the trip are discussed together with our commentary in relation to the Spain & Sweden trip below, which is scheduled to occur in June 2018. However, we note that despite our requests, no details relating to reimbursements received from students in respect of this trip have been provided by the Company’s Business Manager, Mr Ferguson;

2. The Company made an unauthorised direct payment transfer to an account held by Mrs Amy Ferguson and Mr Kevin Ferguson on 29 March 2018 in the amount of $20,000 for what appears to be spending money in Dubai. We note that despite our requests for information, no source documents detailing how these transfers have been expended have been provided to our office.

3. The Company made an unauthorised direct payment transfer to an account held by Mr Paul Thomson and Mrs Jenny Thomson on 29 March 2018 in the amount of $20,000 for what appears to be spending money in Dubai. We note that despite our requests for information, no source documents detailing how these transfers have been expended have been provided to our office.

Spain & Sweden: June 2018

1. Various payments were made in respect of pre-paid bookings on or around 29 March 2018 which was around the same time the Accounts Team’s viewing access to online banking was removed by Mrs Ferguson.

2. The Company has pre-paid the flights, accommodation and a cruise for a further trip to Europe from 27 June 2018 to 8 July 2018.

3. Whilst we have not received all the details pertaining to this upcoming trip, a couple of the known costs associated with this trip are summarised below:

a. From 27 June 2018 to 8 July 2018, the KCFA students are staying in the Sofitel Biarritz le Miramar Thalassa Sea & Spa for a total cost of $115,954.07. I note that this includes various rooms, double rooms, as well as 1 Prestige Junior Suite for E 975.00 per night.

b. Payment of $100,918.60 to Cruise Republic. I do not have the full itinerary for this part of the trip.

Collectively, for the 2018 YTD the KCFA has cost the Company (largely in relation to overseas travel and activities) in excess of circa $459,000. We have concerns regarding the substantiation of payments “expensed” in the management accounts as the bulk of these expenses relate to direct transfers made from the Company to Mr Paul Thomson and Mrs Amy Ferguson’s personal bank accounts. Accordingly, all the travel costs are yet to be substantiated and expensed appropriately and upon reconciliation, may in fact be identified as an unauthorised related party benefit akin to the 2016 travel. This may in turn lead to the same outcome as the 2016 travel, incurring significant FBT liabilities payable as a result of unauthorised related party benefits by the school.

We require the further records and information that has been requested to complete a review of the 2017 and 2018 travel, particularly in relation to the treatment of related party benefits for the completion of the 2017 financials. At this stage, without substantiation of the true costs of the overseas trips, it is unclear whether there are in fact residual amounts owing to the Company from these direct transfers, and further, what the impact these transactions have on the Related Party Loan Accounts and FBT returns.

Credit Card Expenditure

The transactions listed below are only a sample of the transactions detailing the payments which have occurred on Mr Paul Thomson and Mrs Amy Ferguson’s Company credit cards during the 2017 calendar year (“the Credit Cards”).

The sample transactions listed above have not been disclosed in the Company’s management accounts and accordingly we have requested supporting documents detailing the nature of these transactions so that we can recommend the correct accounting treatment and assess whether the Company is likely to incur any FBT liability in relation to these expenses. Prima facie, given the transaction descriptions and the nature of the expenses, the transactions appear likely to carry some portion of unauthorised related party benefit.

Despite our requests for information from Mr Paul Thomson and Mrs Amy Ferguson, no source documents supporting these transactions have been provided to our office.

Mr Kevin Ferguson – Macquarie Leasing Transaction

From a review of the Company’s BOQ Main Account, there is a payment of $55,644.59 which occurred on 31 January 2017 which was paid to Macquarie Leasing. Following a review of the supporting documents, it appears that this payment to Macquarie Leasing was in respect of a chattel mortgage held in the name of Mr Kevin Ferguson. The payment was subsequently booked to Mrs Amy Ferguson’s loan account in the Company’s management accounts. Given the incorrect accounting treatment of this transaction, the payment of $55,644.59 should in fact be reflected as a payment made by the Company on Mr Kevin Ferguson’s behalf. As this payment was an unauthorised transaction processed by Mrs Amy Ferguson and/or Mr Paul Thomson, this payment should be added to Mr Kevin Ferguson’s loan account.

Unauthorised 2016 Back pay & Bonuses

As detailed in the auditor’s notes for the financial year ended 31 December 2016, back pay and/or bonuses including in the Related Party Disclosure were summarised as follows:

We have on numerous occasions requested from Mrs Amy Ferguson and Mr Paul Thomson, along with the Company’s previous auditor, details and a breakdown of the amounts declared and purportedly paid by the Company in respect of back pay and/or bonuses. To date, limited records and commentary from parties have been supplied however we do note that we have received a schedule which we understand was prepared by Mr Paul Thomson and Mrs Amy Ferguson’s financial planner (“the Financial Planner”).

As a result of the lack of information supplied to our office, along with the poor record keeping and the state of the management accounts maintained by the Company, we have had to make our own determinations based on investigations and enquiries into these transactions. Accordingly, in relation to these unauthorised back pay and/or bonuses, we advise as follows:

- The Company’s management accounts do not disclose any Salary & Wages to teaching or non-teaching staff for the month of July 2016, which is unusual.

- The Company’s management accounts do reveal $670,000 in payments on 17 June 2016, with PAYG of $210,815 and a net payment of $459,185. Notwithstanding that this transaction was recorded in the accounts in 17 June 2016, this payment appears to have been made from the Company’s BOQ Main Account on 12 July 2016.

- The spreadsheet purportedly prepared by the Financial Planner revealed the following calculations for determining back pay and/or bonuses owing to Mr Thomson and Mr Ferguson. A summary of gross amounts is provided below:

- The payment of $459,185 from the BOQ Main Account which was paid on 12 July 2016 is consistent with the net (after tax) back pay and/or bonuses as outlined in the summary purportedly prepared by the Financial Planner.

We are advised that the 2016 Bonuses & Back pay were not authorised by the Board. We also reiterate that in our first interim report we outlined the further key information that we required in relation to these transactions, namely information and evidence confirming how this significant increase in related party remuneration was approved and how the bonuses and/or back pay were paid. No information has been forthcoming.

Potential link between 2016 Bonus/Back pay payments and 2016 Related Party Loan Accounts

A summary of the Company’s related party loan accounts balances as at 31 December 2015 is as follows:

- Mr Paul Thomson: $50,000

- Mrs Amy Ferguson: (nee Thomson) $387,862

- Loans to Employees – Other: $9,250

- Total related party loans: $447,112

As noted earlier, on 12 July 2016 the Company made a payment from the BOQ Main Account in the amount of $459,185 which was in respect of purported back pay and/or bonuses owing to Mr Paul Thomson and Mr Kevin Ferguson. This amount was purported to represent gross payments of $670,000 less the purported tax withheld of $210,815.

On 21 July 2016 the Company received two deposits into the BOQ Main Account in the amount of $218,000 each (totalling $436,000). These transactions were subsequently booked to an account listed in the management accounts as having been paid from “Westpac Credit Card”. Whilst we do not currently have the details to unequivocally confirm who or where the two $218,000 payments were received from, our prima facie view is that these funds were in all likelihood sourced from the $459,185 which was paid to Mr Paul Thomson and Mr Kevin Ferguson as back pay and/or bonuses on 12 July 2016.

On 31 December 2016, a journal entry was created in the amount of $436,000 which closed out the two $218,000 payments (booked to the notional ‘Westpac Credit Card’ account) and the $436,000 of related party loans associated with Mr Paul Thomson and Mrs Amy Ferguson. As a result of this journal, at 31 December 2016, the related party loan accounts had reduced from $447,112 as at 31 December 2015 to $64,440.33.

Given these related party payments were unauthorised, the Board should consider amending the financial statements for the financial year ended 31 December 2016 and allocating the unauthorised back pay and/or bonuses of $459,185 (net) to the loan accounts of the relevant parties. This recommended treatment of these transactions will be further discussed later in this report.

Out final report will provide recommendations relating to the implementing of a conflict of interest policy to ensure related party remuneration is properly managed through a transparent process moving forward.

2017 Related Party Loan Accounts

Summarised below are the Related Party Loan Accounts as they appear in the Company’s audited financial statements for the years ended 31 December 2015, 31 December 2016 and per the unreconciled management accounts for the year ended 31 December 2017.

The 2015 and 2016 loan accounts were addressed in the previous section of this report.

Clearly any loan accounts, particularly related party loan accounts, are a concern for the organisation which is intended to be a ‘not for profit’ organisation, and our final report will be recommending that policies and controls are put in place to both collect all outstanding loan accounts immediately (once reconciled) and ensure school funds cannot be used for personal reasons moving forward.

For the purposes of this report, we provide the following further summaries of the loan accounts owing from Mr Paul Thomson and Mrs Amy Ferguson for transactions that have occurred (and have been reconciled to date) in 2017.

Loan Paul Thomson – Financial Review:

Mr Thomson’s loan account in respect of transactions which have been identified in the 2017 financial review from January 2017 to June 2017, relate to personal expenditure paid for by the Company. The transactions comprising of $12,049.56 owing from Mr Paul Thomson are detailed in the table below:

(Table 3.1 in GT Advisory Interim report omitted)

Loan Paul Thomson – CC Electronics:

Mr Thomson’s CC Electronics loan account is in respect of transactions which have been identified as having been paid on the Company’s credit card and relate to personal expenditure. The transactions comprising $18,952.62 owing from Mr Paul Thomson are detailed in the table below

(Table 3.2 in GT Advisory Interim report omitted)

Loan Amy Ferguson (nee Thomson) – Financial Review:

Mrs Amy Ferguson’s loan account in respect of transactions which have been identified in the 2017 financial review from January 2017 to June 2017, relate to personal expenditure paid for by the Company. The transactions comprising of $3,894.47 owing from Mrs Amy Ferguson are detailed in the table below:

(Table 4.1 in GT Advisory Interim report omitted)

Loan Amy Ferguson (nee Thomson) – CC Electronics:

Mrs Amy Ferguson’s CC Electronics loan account is in respect of transactions which have been identified as having been paid on the Company’s credit card and relate to personal expenditure. The transactions comprising of $2,111.30 owing from Mrs Amy Ferguson are detailed in the table below:

(Table 4.2 in GT Advisory Interim report omitted)

Loan Amy Ferguson (nee Thomson) – CC Travel:

I note in respect of this loan owing from Mrs Amy Ferguson at 31 December 2017, whilst the management accounts are still in the process of being reconciled and the actual loan account is likely to increase significantly, included in the amount owing at 31 December 2017 is a payment on Mrs Amy Ferguson’s Company credit card to the Hyatt Canberra which occurred on 14 June 2017 in the amount of $27,514.11.

(Table 4.3 in GT Advisory Interim report omitted)

Statutory lodgements – history, fines/interest, delays funding

As outlined in our previous report, the finance function of the school has not been properly resourced for some time, including both with appropriately qualified staff and also what appear to be outdated systems. This is evidenced by the history of non-compliance with the ATO in regard to late lodgements associated with Business Activity Statements, Superannuation Guarantee Charge Liabilities and FBT lodgements and the circa $176,000 in penalties and interest charges borne by the Company from 2014 to 2016.

We will further elaborate on this in our final report.

Breaches of the Australian Education Act and the Australian Education Regulation 2013

As an approved authority registered with the Australian Government, the Company and its officers have significant legal responsibilities under the Australian Education Act 2013 (“the Act”) and the Australian Education Regulation 2013 (“the Regulation”) it must adhere to in order to be eligible for funding by the Department of Education.

The basic requirements outlined by the Department of Education require approved bodies corporate to satisfy Sections 75 and 78 of the Act. In order to be an eligible authority, an approved bodies corporate must [inter alia]:

- Meet the ‘fit and proper person’ requirement: the approved authority and key individuals must have the necessary expertise, experience and arrangements in place to make informed decisions that benefit the schools. Key individuals include, for example, board members, principal, business manager, finance officer and anyone able to exercise significant influence over the operations of the approved authority, regardless of whether they have a formal or official role with the authority;

- Spend, or commit to spend, funding provided under the Act for the purpose of providing school education at a school or schools for which the authority is approved; and

- Keep records regarding, amongst other things, the financial administration of the authority, school(s), and the authority’s compliance with the Act and Regulation.

As evidenced in this report, our view is that under the current circumstances, the Company;

We will elaborate on this in our final report.

………………….”

Show cause letters

[7] On 1 June 2018, the Board of Directors of Kimberley College sent letters to the Applicants, suspending them from work. The Applicants, in accordance with these letters, were provided until 5.00pm on 8 June 2018 to respond to the allegations of misconduct as set out in the correspondence.

[8] The allegations against Ms Amy Ferguson based on the GT Interim Report were as follows:

“As Chief Financial Officer of the College, you have engaged in wilful and/or deliberate behaviour that is inconsistent with the continuation of the contract of employment, causing a serious and imminent risk to reputation, viability or profitability of the College, in that you:

1. Breached your duties under section 181 of the Corporations Act 2001 (Cth) by failing to exercise your powers and discharge your duties in good faith and in the best interests of the College, and for a proper purpose;

2. Breached your duties under section 182 of the Corporations Act 2001 (Cth) by improperly using your position to gain an advantage for yourself and/or someone else, causing a detriment to the College;

3. Breached your duties under the Australian Education Act 2013 (Cth) and Regulations by not ensuring the College and yourself met the ‘fit and proper person requirement’ including by:

(a) Not ensuring the necessary arrangements were in place to make informed decisions to benefit the College;

(b) Spending, and committing to spending, funding provided under the Act for purposes other than providing school education at the College; and

(c) Failing to keep records regarding, amongst other things, the financial administration of the authority, school(s), and the authority’s compliance with the Act and Regulation.

4. Caused, or failed to prevent, irregular and/or fraudulent financial transactions as set out in Annexure A which personally benefited individuals (including yourself) from College funds;

5. Caused, or failed to prevent unauthorized financial transactions from being processed;

6. Failed to ensure the proper financial records, policies, procedures and delegations were implemented, maintained and retained;

7. Failed to remit payments with respect to Superannuation Guarantee Charge in an appropriate way, resulting in the issue of Director Penalty Notices;

8. Failed to properly access, record and lodge appropriate fringe benefits tax returns for 2016 and 2017 resulting in potential interest and penalties being incurred; and

9. Conducting yourself in a way which causes the Board to consider whether it has, as a result of the matters set out in Annexure A, the necessary trust and confidence in you to continue your role.”

[9] The allegations against Mr Kevin Ferguson based on the GT Interim Report were as follows:

“As College Business Manager, you have engaged in wilful and/or deliberate behaviour that is inconsistent with the continuation of the contract of employment, causing a serious and imminent risk to the reputation, viability or profitability of the College, in that you:

1. Breached your duties under section 182 of the Corporations Act 2001 (Cth) by improperly using your position to gain an advantage for yourself and/or someone else, causing a detriment to the College;

2. Breached your duties under the Australian Education Act 2013 (Cth) and Regulations by not ensuring the College and yourself met the ‘fit and proper person requirement’, including by spending, and committing to spending, funding provided under the Act for purposes other than providing school education at the College;

3. Caused, or failed to prevent, irregular and/or fraudulent financial transactions as set out in Annexure A which personally benefited individuals (including yourself) from College funds; and

4. Conducted yourself in a way which causes the Board to consider whether it has, as a result of the matters set out in Annexure A, the necessary trust and confidence in you to continue in your role.”

[10] The allegations against Mrs Jennifer Thomson based on the GT Interim Report were as follows:

“In your role as Personal Assistant to the Principal of the College, you have engaged in wilful and/or deliberate behaviour that is inconsistent with the continuation of the contract of employment, causing a serious and imminent risk to reputation, viability or profitability of the College, in that you:

1. Breached your duties under section 182 of the Corporations Act (Cth) by improperly using your position to gain an advantage for yourself and/or someone else, causing an detriment to the College;

2. Breached your duties under the Australian Education Act 2013 (Cth) and Regulations by not ensuring the College and yourself met the ‘fit and proper person requirement’, including by spending, and committing to spending, funding provided under the Act for purposes other than providing school education at the College;

3. Caused, or failed to prevent, irregular and/or fraudulent financial transactions as set out in Annexure A, which personally benefitted individuals (including yourself) from College funds; and

4. Conducted yourself in a way which causes the Board to consider whether it has, as a result of the matters set out in Annexure A, the necessary trust and confidence in you to continue in your role.”

[11] The Applicants denied engaging in “the alleged serious misconduct, or any other misconduct which warranted such dismissal”. 8

[12] On 11 June 2018, the Board held a meeting to review the information available to it, and decided to terminate Mrs Thomson’s employment for misconduct, and to terminate Mr and Ms Ferguson’s employment for serious misconduct. The dismissals had immediate effect. Mrs Thomson was advised she would not be required to work her notice period, and instead would be paid five weeks’ wages in lieu of notice. 9 The three separate dismissal letters issued to the three Applicants on 12 June 2018 adopted each of the allegations set out in the show cause letters as the reasons for termination.

[13] There was no dispute that at the time of the dismissals, the Applicants were protected from unfair dismissal in accordance with s.382 of the Act, and were dismissed at the Respondent’s initiative for serious misconduct, in the case of Mr and Ms Ferguson, and misconduct in the case of Mrs Thomson.

[14] The three applications were listed for hearing concurrently at Brisbane, on Monday 18 and Tuesday 19 March 2019. The files indicate that in Mrs Thomson’s case she was represented by Australian Law Partners in the period immediately before her termination. At the time of filing on 2 July 2018 the three applications stated that each Applicant was represented by CRH Law. On 31 July 2018 Adams Wilson Lawyers commenced acting for the three Applicants.

[15] The files record an unsuccessful conciliation conference took place on 1 August 2018 which dealt with all three matters concurrently. On 6 August 2018 Adams Wilson Lawyers advised the Commission it ceased to act for the Applicants. Despite this, on 24 August Adams Wilson Lawyers sent correspondence to the Commission confirming that it had ceased to act for the Applicants, and that it understood the Applicants would remain self-represented up to and including the hearing; however, this was not withstanding that it had received instructions from the Applicants to submit an objection to the Respondent being legally represented at the hearing and filed submissions in support of that objection.

[16] The initial listed hearing dates of 10, 11 and 12 October 2018 were adjourned on the basis that the parties were engaged in settlement negotiations. Member assisted conferences were conducted before another member of the Commission on 1 and 20 November 2018 in an attempt to settle the applications.

[17] My chambers were advised that the settlement discussions were ultimately unsuccessful and the matter again came on for directions on 30 January 2019. At the January 2019 directions hearing the Applicants were clear that they would be self-represented at the hearing. I granted the Respondent leave to be represented. I also indicated at that directions hearing that in the event that the Applicants decided to again seek to be legally represented the Commission would be inclined to grant that application.

[18] On the afternoon of Wednesday 13 March 2019, a few days before the scheduled hearing dates, a telephone call was received in my chambers from the law firm Aitken Whyte indicating they were now seeking leave to represent the Applicants in the matter and would be filing a Form 53. The representative from Aitken Whyte also indicated that they may be seeking an adjournment of the hearing. On Thursday 14 March 2019 an application was made by Aitken Whyte to be granted permission to represent the Applicants and a formal request was made for an adjournment on a number of grounds.

[19] The Commission invited Minter Ellison Gold Coast (‘MEGC’) as representative for the Respondent to express its view in relation to the applications for representation and adjournment. MEGC advised it did not oppose the granting of permission for the Applicants to be legally represented but opposed adjournment and foreshadowed a costs application if an adjournment was granted. However MEGC also indicated that because it had given an undertaking not to brief counsel, in the event the Applicants intended to brief counsel, it expected to be informed of this and to receive an equal opportunity to instruct counsel for the Respondent.

[20] Aitken Whyte responded that if an adjournment was granted it would intend to brief counsel. MEGC then responded that on that basis an adjournment will be required so that the Respondent can instruct counsel, and then repeated its earlier intention to make an application for costs.

[21] I decided to grant leave for the Applicants to be represented, however refused the Applicants’ request for adjournment on the basis that it was unreasonable for the Applicants to seek a further adjournment at such short notice given the length of time the Applicants had been on notice of the hearing, the history of the matter, and a further adjournment being inconsistent with the manner in which the Commission is required to perform its functions in accordance with s.577 of the Act.

[22] I advised the parties that whether they elected to brief counsel was entirely a matter for them. The Applicants were ultimately represented by Mr S Strewavas of Counsel instructed by Australian Law Partners at the hearing. The Respondents were represented by Ms K Gibb, a Solicitor of MEGC. The parties declined a further final attempt at conciliation before another member of the Commission on the morning of the hearing. 10 The hearing proceeded on 18 and 19 March 2019 and closing written submissions were filed by the parties on 8 April 2019.

[23] On a separate matter, the day immediately following the conclusion of the hearing but before the filing of closing submissions, email correspondence was received in my chambers from a Detective Senior Constable of the Queensland Police Service who advised that they had been present during the course of the hearing, that a police investigation had been proceeding into matters concerning the Applicants, and requesting a copy of the transcript of the hearing.

[24] More importantly the email correspondence from the Detective Senior Constable included adverse opinion regarding the credit of the Applicants which I understood was made on the basis of convincing the Commission that the transcript should be made available. I directed my Associate to send email correspondence to the Detective Senior Constable advising that their correspondence would need to be disclosed to the parties as it may give rise to a reasonable apprehension of bias, particularly if I were to proceed to determine the matter without disclosing the correspondence. The Police correspondence was forwarded to the legal representatives of the parties who subsequently advised chambers that they did not object to me continuing to determine the matter. I determined that despite the correspondence received I could still form my own views regarding the evidence and it was appropriate for me to proceed to deal with the matter, and the parties were advised accordingly.

EVIDENCE AND SUBMISSIONS

[25] Mrs Thomson gave evidence that she was employed by Kimberley College in 2001 as an administration officer and Personal Assistant to the Principal (her husband, Mr Thomson). She stated she never held the position of Director at the College. 11 Ms Thomson said her duties were administrative and her salary was approximately $130,000 a year at the time of her dismissal.12

[26] Ms Ferguson’s evidence was that she was employed by Kimberley College in 2001 as an administration officer. On 10 February 2010, she was appointed as a Director at the College, and held this position until 10 September 2014 when she resigned from the position. 13 Ms Ferguson stated that at the beginning of 2017, she and Mr Ferguson established the Kimberley College Football Academy, for which her role was Football Operations Manager. She stated that undertaking these additional duties meant she was working long hours, and that she was exhausted and overworked.14

[27] Ms Ferguson gave evidence that throughout her employment period, she was never offered a contract. 15 Ms Ferguson said the following in an email of 17 April 2018 attached to her statement; “I have been solely responsible for the College’s accounting since 2004, meaning I have passed 14 audits.”16

[28] Ms Ferguson stated that in 2004, in response to the financial officer giving two weeks’ notice, she undertook to learn the position. She submitted that she held the position of financial officer until September 2017. Ms Ferguson’s evidence was that during her time as financial officer, enrolment at the college increased from around 250 students in 2004 to around 950 students in 2018; however, despite this increase, a financial assistant was never appointed (“save for one employee who was employed…for around 18 months”). 17

[29] Ms Ferguson gave evidence that an audit was conducted in 2016, which involved a review of the administration. As a result, a report was provided on 20 September 2017, which provided, among other things, that the business office operation was deficient due to understaffing and lack of specialist staff working in accounts and with reporting. 18

[30] Mr Ferguson gave evidence that he was employed by Kimberley College on 3 October 2011, and was appointed as a Director on 26 June 2012. He stated he remained a Director until 10 September 2014, when he resigned from the position. 19 He said he resigned as a Director under instruction from the Queensland Non-State Schools Accreditation Board (QNSSAB) and believed it was something to do with conflict of interest.20 He gave evidence that on commencement with the College, he undertook general administrative duties, however, his position evolved to be one of “non-financial business manager”.21

[31] Mr Ferguson’s evidence was that following opening the Kimberley College Football Academy, and due to its success, he started moving away from his role as business manager at the end of 2017. He stated that due to lack of appropriately trained staff, he continued to carry out “a few of [his] old duties”. 22 He said at the time of termination his annual salary was $180,000.23

[32] Mr Wilton gave evidence for the Respondent. He said he held the position of volunteer Director and Chairman of the Board of the Respondent. 24 He said there are four Directors and Company Members.25 Mr Wilton said he became aware that he was listed on ASIC records as a director of the College for some period in the years 2008, 2009 and 2010 but he was completely unaware of this and did not act as a Director during those times.26 Mr Wilton said at all relevant times the College’s key management positions were held by Mr Paul Thomson, and members of his family.27

Did Ms Ferguson cease to be the CFO in September 2017?

[33] It was submitted for Ms Ferguson that following the 2016 audit of the College and due to her overburdened workload, she was relieved from her role as the financial officer of the College in September 2017, 28 and Mr Cyril Joseph was appointed to the role of financial officer in her place.29 Ms Ferguson denies that she was employed as CFO for Kimberley College at the time of her dismissal; she states that she was employed as the Football Operations Manager and a part-time administration officer.30

[34] Ms Ferguson was referred during her evidence to the list of tasks given to Mr Joseph which include that he will work under her direction, and that he is to support Ms Ferguson in the conduct of her role, and Ms Ferguson is to be kept informed about all matters relating to carrying out the list of tasks outlined. 31 It was put to Ms Ferguson that after the appointment of Mr Joseph she continued to hold herself out as the CFO, and Ms Ferguson was referred to an attachment to her evidence in which she indicated that on 12 April 2018 Mr Joseph did not have access to the ATO portal.32 In the same document Ms Ferguson agreed that she said she did not need guidance from Mr Joseph to perform her tasks33 which tends to indicate that she remained in a financial role.

[35] It was put to Ms Ferguson that in an email she drafted on 7 May 2018 which she sent to her mother, and intended to go to Donovan Knapp Lawyers, that she proposed she would resign from her role as CFO immediately as her health did not permit her to continue to work. Ms Ferguson said that the private email was sent from her private account but not by her, and the email was drafted by members of the family. Ms Ferguson claimed she did not send the email and that her husband Mr Ferguson sent it. 34 Ms Ferguson accepted that she had access to make payments and did make payments on a weekly basis out of school bank accounts up to 20 April 2018.35

[36] Mr Wilton rejected the evidence of Ms Ferguson that she ceased holding the position of CFO when Mr Joseph was appointed in September 2017, saying Mr Joseph did not hold the position of CFO and provided evidence that Ms Ferguson continued as CFO after his appointment. 36

[37] Mr James Cook is a Senior Accountant at GT. 37 GT was engaged to investigate by the Board in April 2018. Mr Cook said in response to paragraphs 4,7, 10 and 57 of Ms Ferguson’s statement, that on the information available to GT Ms Ferguson continued to maintain oversight and control of the College’s bank accounts up until on or around 20 April 2018.38 Mr Cook said based on the review, Mr Joseph was not the CFO of the College and any payments were required to be approved and released by Ms Ferguson who appeared to hold administrator status and authorities across the College’s online bank accounts. He said further Mr Joseph’s role appeared to have been hindered by Ms Ferguson, and referred to an example of Ms Ferguson removing access to online banking and preventing Mr Joseph from being able to even view transactions.39

[38] I am satisfied on the basis of the evidence that Ms Ferguson continued in the role of CFO until on or around late April 2018 when she ceased coming to work, and was later replaced by Mr Cook as an interim CFO.

Futsal Field

[39] Mr Wilton gave evidence about a Board meeting on 14 March 2017 where Mr Thomson and Mr Ferguson were in attendance as key management employees, and they asked the Board to approve expenditure on a new futsal field at a cost of $150,000 . The Board declined the request, and asked Mr Thomson and Mr Ferguson to come back with a proposal. Mr Wilton said that he was extremely concerned when school commenced after the Easter School Holidays and he learned that Mr Thomson and Mr Ferguson had ignored the Board and the futsal field had been installed over the holidays at a cost of $350,000. 40

Underwood Bus Service Contract

[40] Ms Ferguson gave evidence that Mr Wilton owns and operates “Underwood Bus Service”, which supplies buses for the College’s daily bus runs and excursions. She stated that in July 2017, she raised concerns with Mr Thomson regarding Mr Wilton failing to enter deposits into the College’s bank accounts. She submitted that Mr Wilton’s drivers were accepting cash from students, despite the contract with the College providing this was not permitted. Her evidence was that this cash was not being passed on to the College. There was some evidence concerning the fact of Mr Wilton, as Chair of the College Board, owning and operating the Underwood Bus Service which has a contract with the College. I have considered the evidence and have concluded it is unnecessary for me to make any findings regarding that matter as it is not sufficiently relevant to the matters before me for determination.

Cyclical Review August 2017

[41] Mr Wilton said in August 2017 Education Financial Services Pty Ltd (EFS) was engaged by the College to conduct a cyclical review. He said the Education (Accreditation of Non-State Schools) Act 2017 requires independent schools to conduct a cyclical review every five years to maintain their accreditation and continue to receive Government funding. 41

[42] Mr Wilton said he understood that in 2013 the College conducted a self-review (which can be done if assessed by independent validators); however, this review was problematic, and the NSSAB directed the College to conduct a further review in 2016 which the College failed to do, and this agitated the QNSSAB and Mr Thomson approached EFS for assistance. Mr Wilton said the Board was not initially aware of EFS’s engagement. 42 Mr Wilton said he now knows that the College was at risk of having its funding withdrawn.

[43] Mr Wilton said he had met with Mr Peter Hollett of EFS previously, but did not begin to deal with him directly until he contacted him regarding some updates on the cyclical review Mr Hollett had provided. He said until this time the Board did not have much insight into the operational running of the College. 43

[44] Mr Wilton said one of the recommendations of the cyclical review was the engagement of Mr Cyril Joseph, a qualified accountant to assist with the financial accounts. 44

[45] Mr Wilton said that after the conclusion of the AGM in November 2017, which was attended by the auditors, comments were made concerning the issue of staff loans.Mr Thomson was asked how the loans were repaid and Mr Wilton recalled Mr Thomson saying he and Ms Ferguson took out a loan against their homes to repay the loans. 45

[46] Ms Ferguson said that in November 2017 the College’s Annual General Meeting was called and on 24 November 2017 Mr Wilton was provided with a progress report by Mr Hollett of Educational Financial Services referring to shortcomings in the business office operations. 46

[47] Ms Ferguson’s evidence was that Mr Thomson, as Principal of Kimberley College, engaged Mr Mike Millard to undertake the College’s “Cyclical Review”. She gave evidence that, Mr Millard had been engaged by the Board in November 2017, and that he continues to be engaged by the Board as “advisor to the board”.

[48] Ms Ferguson said that on 16 November 2017, Mr Wilton sent an email to Mr Millard regarding his work on the Cyclical Review. This correspondence also included harsh words regarding Mr Thomson. Ms Ferguson gave evidence that as a result of this email, “and other behaviour by Mr Wilton”, the “company members” discussed the matter and decided that Mr Wilton would be voted off the Board. Ms Ferguson claimed that Mr Peter Hollett of Educational Financial Services, provided advice not to vote Mr Wilton off the Board, so that the Annual General Meeting could proceed “unhindered”, and that a more appropriate opportunity would arise later to have Mr Wilton removed.

January 2018 Board meeting

[49] Mr Wilton said in about January 2018 a Board meeting was held at which a question arose about salary increases and bonuses awarded to Mr Thomson and the Applicants in the previous financial year. He said Mr Thomson was asked to provide further information and no information was ever provided. 47

First meeting with Minter Ellison Gold Coast 2018

[50] Mr Wilton said in February or early March 2018 Mr Hollett arranged for himself and another director to meet with solicitors from MEGC to assist with concerns about corporate governance at Kimberley College. 48

Director Penalty Notices issued 28 March 2018

[51] Mr Wilton said on 29 March 2018 the Directors, including himself, each received Director Penalty Notices (DPN’s) from the Australian Taxation Office (ATO) in relation to superannuation debt relating to the period January 2014 to December 2017. The DPN notices indicated that the Directors may each be liable for $1,300,000 in unpaid superannuation. Mr Wilton said he tried to get answers from Ms Ferguson about the DPN’s. He said Ms Ferguson left for a trip to Dubai without resolving the DPN issue. 49

[52] Ms Ferguson said that on 28 March 2018 Mr Wilton made several phone calls to her mobile phone in relation to a DPN he had received from the ATO. Ms Ferguson said that she assured Mr Wilton that she was in the process of lodging information with the ATO which would see the DPN completely or almost completely revoked. 50

[53] Ms Ferguson claimed that as Mr Joseph was employed in September 2017, superannuation was no longer her responsibility and she provided an email sent between Mr Joseph and Mr McCullough which she stated confirmed this. 51 Ms Ferguson also relied on a list of tasks52 given to Mr Joseph to show she was no longer responsible for superannuation. It is notable that this list starts with the following:

“Cyril will work under the direction and supervision of Amy (Ms Ferguson) and Alan McCullough to complete a set of tasks outlined below…”

[54] Ms Ferguson said that in early 2018 it came to her attention that no further information had been provided to the ATO by Mr Joseph and Mr Thomson instructed her to recommence work on the superannuation audit. As I have concluded earlier, Ms Ferguson remained the CFO at this time and I do not accept she had no responsibility for this issue at the relevant time as claimed.

[55] Mr Cook said as a result of the College’s lack of compliance with the ATO it has attracted in excess of $176,000 in penalties and interest charges from 2014 to 2016 related to late lodgement of Business Activity Statements, SGC liabilities and FBT lodgements. Mr Cook said that as a result of significant delays in supplying requested SGC reports and payment confirmations, interest on outstanding superannuation contributions continues to accrue. 53

Removal of accounts team access to online banking

[56] It was put to Ms Ferguson that in March 2018 the accounts team’s access to view online banking was removed by her, and that is when many large payments (in connection with a planned trip to Spain and Sweden) were made by the College. Ms Ferguson said that she changed her banking password when she discovered that Mr Joseph had given that password and log on details to his assistant without discussing it with her. Ms Ferguson rejected that this was done to hide payments. 54 I am not inclined to accept Ms Ferguson’s claim in this regard because the timing of this event coincided with a subsequent dispute between the Board and members of the Thomson family about whether further payments should be made to fund the planned trip to Spain and Sweden. It seems more likely that Ms Ferguson was attempting to limit the extent of knowledge concerning these payments. I deal with this issue in greater detail below.

Alleged Bullying by Mr Wilton 29 March 2018

[57] Ms Ferguson gave evidence about an incident that she alleged occurred on 29 March 2018 where Mr Wilton “roared past me” while driving his car. She also provided with her evidence a statement she said was provided to her from Ms Eleine De Klerk regarding the conduct of Mr Wilton that day, and these incidents were the basis for a request she made to the College Board that Mr Wilton cease communication with her. 55

[58] Mr Wilton sent correspondence to Mr Thomson in response to Ms Ferguson’s request rejecting the suggestion that he had bullied or harassed Ms Ferguson and asserting the Board’s right to investigate the finances of the College to carry out their duties and responsibilities. 56 Mr Wilton denied that he engaged in any bullying of Ms Ferguson. The allegations made by Ms Ferguson appear to me to be peripheral to the issues in dispute and it is unnecessary to deal with them any further.

Appointment of GT Advisory April 2018

[59] Mr Wilton said that on 25 April 2018 the Board instructed MEGC to appoint GT to undertake an independent review of the College finances, and Mr Wilton instructed MEGC to write to Mr Thomson advising that they had been engaged by the Board to undertake a financial review of the College. Mr Wilton said he was aware MEGC received a response from Donovan Knapp Lawyers, advising they had been instructed to act for Mr Thomson. 57

[60] Mr Cook said in April 2018 MEGC engaged GT on behalf of the Respondent to conduct a financial review of the College which he understood arose from concerns about the financial position and management of the College following the issue of Director Penalty Notices from the ATO concerning unpaid superannuation. 58

[61] Mr Cook set out in detail the nature of the work required as instructed by MEGC, and he said the review took nearly four months to complete to a final report. Mr Cook said a significant number of issues remain unresolved as a result of information not being forthcoming. 59

[62] Ms Ferguson submitted that on 20 April 2018, she attempted to log into Kimberley College’s bank account to process payroll, but discovered that her access had been cancelled by the Board without prior discussion. 60

[63] Mr Cook said on 27 April 2018 he was appointed by the Board as the interim CFO of the College, as the current CFO Ms Ferguson was absent on sick leave and the Board was concerned there were serious issues of financial management and potentially viability. Mr Cook said his role as interim CFO did not influence GT’s ability to complete the review in an objective and impartial manner. 61

2 May 2018 letter to Ms Ferguson

[64] Mr Wilton said that he was aware that a meeting occurred at the College on 1 May 2018 attended by representatives of MEGC and GT, and Mr Thomson and Ms Ferguson. The meeting was in regard to the review, access to documents, and interim financial arrangements. Mr Wilton said that he understood sometime following this meeting Ms Ferguson stopped coming to work. He said as there are no leave records available for Ms Ferguson, he was willing to accept Ms Ferguson’s account that she commenced stress leave on 4 May 2018, but had been absent before this date.

[65] Mr Wilton said that he understood that Ms Ferguson later said that she provided her medical certificate to the ‘relevant person’ at the College, but to his knowledge the medical certificate had never been located, and despite requests to produce the certificate, or a copy of it, this has not occurred. Mr Wilton said on 2 May 2018 he instructed MEGC to write to Ms Ferguson about her illness.

[66] Mrs Thomson accepted that she attended a meeting on 1 May 2018 including her husband, MEGC and GT. Mrs Thomson accepted there were several meetings. 62 Ms Thomson appeared to accept that she had seen a draft email response to issues raised prepared by her daughter, Ms Ferguson, on 7 May and 11 May related to allegations concerning the Applicants.63

[67] Ms Ferguson stated that on 2 May 2018, she received a letter from MEGC regarding her employment with Kimberley College. The letter provided that before she could return to work, she needed to provide written confirmation that she was fit to return to work. Ms Ferguson gave evidence that on 4 May 2018, she officially commenced stress leave, having been absent from work for some time before this date.

[68] Ms Ferguson denied that she had gone into the office on 2 May to collate records for Mr Cook. It was put to Ms Ferguson that she sent an email to her mother on 7 May, and again on 11 May while she was on sick leave, responding to several matters raised in the first interim GT report and that she met with Mr Cook on 17 May while on sick leave. Ms Ferguson did not contest these events occurred but said she met Mr Cook because she was being pressured about the DPN’s.

Events surrounding First GT Interim Report of 10 May

[69] Mr Cook said upon initial review it was not clear whether the College maintained proper source documents and other financial records. Following a meeting with the Board and MEGC he was provided the details of relevant College personnel to assist with the information required for GT to complete the review. The details were:

(a) Chief Financial Officer – Amy Ferguson (nee Thomson);

(b) Principal – Paul Thomson

(c) Accountant – Cyril Joseph;

(d) Auditor – Sue Bradnock.

[70] Mr Cook said he initially met with each of the relevant College personnel, except Ms Ferguson as he was informed she was on sick leave. Mr Cook said that he met with Mr Thomson on 2 May who informed him that many of the documents he requested for the Review were in Ms Thomson’s office, which was locked. Mr Cook said that Ms Ferguson shared an office with Ms de Klerk who was also absent from the College that day. 64 Mr Cook said he explained to Mr Thomson he needed permanent and unfettered access to Ms Ferguson’s office and Mr Thomson advised him he did not have the keys to the office and Ms de Klerk would have to provide Mr Cook with access and supply the historical payroll and supplier records.

[71] Mr Cook said he emailed Ms de Klerk and requested urgent access and did not initially receive a response. Mr Cook said on 3 May he emailed Mr Thomson copying in Ms de Klerk advising it was paramount he have access, and advising Mr Thomson that if the office was not open on his arrival he would arrange for a locksmith. Mr Cook said he received an email from Ms de Klerk however she was absent that day.

[72] Mr Cook said that he meet with Mr Thomson who advised that he would arrange access. Mr Cook said temporary access was subsequently provided under the supervision of Mr Ferguson and Mr Cook said he was instructed by Mr Thomson all documents he had requested were located in the shelving running perpendicular to the entry to the office. Mr Cook said he later came to understand the bulk of the source documents for 2016 and 2017 he was seeking were located on another wall in the office, however these were not brought to his attention when he had temporary access. 65

[73] Mr Cook said that on 9 May he emailed Mr Thomson and Ms Ferguson and requested that they provided him source documents being cheque butts, tax invoices and purchase orders so that various transactions could be allocated to the College’s accounts correctly, and he attached a list of the transactions which he could not locate source documents for. Mr Cook said he did not receive a response from Mr Thomson or Ms Ferguson. 66 Mr Cook confirmed the email as sent to Ms Ferguson’s school email address.67

[74] On 10 May 2018, GT provided a first interim report to the Board, which provided that the College’s financial records were in a “poor state” and there was a lack of source documents or adequate explanation relating to expenditure of College funds. 68

[75] Mr Wilton said that on 10 May GT completed an interim report identifying a number of matters, transactions and areas of the College’s finance system requiring further explanation and supporting documentation in order the GT to form a final view in relation to the financial position of the College. He said on 10 May MEGC wrote to Donovan Knapp solicitors enclosing the first report and requesting a response to matters raised in the report from Mr Thomson and Ms Ferguson. Mr Wilton said he has been shown an email from Ms Ferguson to her mother Ms Thomson dated 11 May 2018 which again appeared to be a response to the first GT interim report but again this was not provided to GT or MEGC. 69 He said Donovan Knapp provided MEGC with a response to the First Report. The correspondence indicated that there was insufficient time to respond within the timeframe.

[76] Mr Cook said on 10 May 2018 GT provided an interim report 70 to MEGC, and as part of the first report GT also urgently requested further information required from key management to finalise the report and meet timing expectations of the Board and the ATO.

[77] Mr Wilton said that on 16 May 2018 GT recommended the Board engage MBA Partnership, a firm of accountants, to assist with bringing the College’s management account up to date and this was agreed.

[78] Mr Cook said that on 17 May he meet with Ms Ferguson and Ms de Klerk at Zarraffa’s Coffee, Riverlakes to discuss outstanding SGC objections and the location of superannuation records. He said Ms Ferguson advised him that the records were located at her house but she would make them available to GT so that the SGC objections could be dealt with. Mr Cook said that these documents were not provided until 31 May and 1 June 2018.

[79] On 18 May Mr Wilton said he instructed MEGC to write to Mr Ferguson directing him to cooperate with the review, and on 24 May when Ms Ferguson had still not returned to work Mr Wilton instructed MEGC to write to Ms Ferguson. 71 It was put to Mr Wilton during his oral evidence that he was acting without the authority of the Board. He said there would have been phone calls (between Board members) but there would not have been a written resolution.72

[80] Mr Wilton said on 22 May he meet with Mr Thomson, Mrs Thomson and their solicitor and that Mrs Deborah Horn, Mr Thomson’s other daughter, was also present. Mrs Horn is also employed as one of three Deputy Principals. 73

[81] Mr Wilton said that the purpose of the meeting was to try to deescalate the issues in dispute informally, address media and social media posts, and to discuss Mr Thomson’s succession plan. He said the review had become common knowledge and a vigorous social media campaign had been commenced regarding the review and other matters regarding the College. Mr Wilton said in his view the campaign was extremely damaging to all concerned.

[82] Mr Wilton said he also instructed MEGC to write to Mr Ferguson regarding the KCFA and that he had become aware another European Tour was being planned by KCFA and the Board wished to consider whether it should go ahead in light of the extraordinary expenditure coming to light related the KCFA.

[83] Mr Wilton said that on 25 May 2018 GT wrote to Donovan Knapp lawyers enclosing correspondence to Mrs Horn, Ms Ferguson and Mr Ferguson to advise them that they were having issues obtaining documents and records from the management team of the College, and on 25 May further requests were sent to Mr Ferguson requesting further information.

[84] Mr Wilton said on 28 May, he attended a further meeting with Mr and Mrs Thomson and their solicitor. MEGC also attended and no resolution was reached. He said on 29 May GT wrote to Donovan Knapp following up on the request for information, which he said was now urgent.

[85] Mr Cook said that on 29 May 2018 he spoke to Mr Thomson’s lawyer, Mr Nathan Donovan of Donovan Knapp, about obtaining the balance of source documents. He also said he emailed Mr Donovan to request an explanation from Ms Ferguson regarding transactions in the College’s Bank of Queensland No 1 account from 1 January 2017 to 31 December 2017. Mr Cook said he understood from MEGC that Donovan Knapp was assisting Mr Thomson and Ms Ferguson.

[86] Mr Cook said there remained many unexplained transactions in the College accounts and credit card statements to which there were no corresponding source documents. Mr Cook said in his email to Mr Donovan he also requested an urgent response to previous queries regarding the College Suspense Accounts for 2017 Financial year required for the FY17 audit and outstanding BAS’s and the 2018FY. 74

[87] Mr Cook said he did not receive a response from Donovan Knapp regarding this email. He said throughout the review numerous source documents were provided for legitimate College purposes by Ms Thomson in a manila folder enclosing various tax invoices and receipts associated with the credit cards and debit card. 75

[88] Mr Wilton said that on 30 May 2018 the Applicants, along with other members, gave notice to the Board that they intended holding a general meeting to pass a special resolution to remove the Directors. 76 Mr Wilton said the Board was meeting daily at that stage and would have been discussing all of these things.77 Ms Ferguson did not dispute she attended a members meeting on 30 May 2018.

Events surrounding Second Interim GT Report of 1 June

[89] Mr Cook said that on 1 June 2018 GT provided its second interim report to MEGC. 78 Mr Cook set out the relevant findings in his evidence (which are reflected in the report summary set out earlier in this decision). Mr Cook accepted that he was requested to provide the report as a matter of urgency.79

[90] Mr Wilton said on 1 June 2018 GT completed a second interim report based on information received by way of response to the questions raised in the first interim report. 80 He said the second interim report was sent to Donovan Knapp on 1 June 2018. He said having regard to the contents of the second interim report the Board resolved to suspend five employees including the Applicants, issuing show cause notices which were hand delivered and emailed on 3 June 2018.81 Mr Wilton said he was not sure where the meeting (that took this decision) was held. He said some meetings were at MEGC and some were at his work. He was not sure whether a resolution was carried but he believed so.82

[91] Mr Wilton was asked to clarify why he also sent a letter to the school community on 1 June. He said there was a lot of bad publicity around the school, and a lot of misinformation on Facebook, radio and television, and Mr Thomson had appeared on radio and television. 83Mr Wilton accepted in oral evidence that even though he approved the show cause letters which were drafted by the lawyers he did not fully understand some of the allegations contained in them himself.84

[92] Mr Wilton said that on 2 June 2018 he received an email from Ms Ferguson. The email was four pages in length and appeared to be refuting matters raised in the second interim report. 85 Ms Ferguson appeared to dispute that she made Facebook posts on the College Facebook page on 1 June. Ms Ferguson accepted that she wrote a lengthy email to Mr Wilton on 2 June responding on various matters.86

[93] Mrs Thomson stated that at the time of receiving her suspension and show cause letter from MEGC on 3 June 2018, she was on stress leave and had a medical certificate which she provided to MEGC. Mrs Thomson confirmed in her oral evidence that she received the show cause letter. 87

[94] Mrs Thomson’s evidence was that, despite the letter of 3 June stating that the information contained therein was to be kept “strictly confidential”, the Board of Directors made the interim report by GT Advisory public by publishing it on the College’s website and directing both parents and students to view the document. Her evidence was that this went against the confidentiality required of the documents in question, and also caused her and her family “severe stress and trauma”. 88

[95] Mr Ferguson gave evidence that he received a letter on 3 June 2018, from MEGC regarding his employment. The letter provided that he had five business days to respond to serious allegations made against him. He gave evidence that the GT which the Board made public by publishing on the College’s website was humiliating for him and his family, and caused a significant amount of stress.

[96] Mr Wilton said in June he was provided a medical certificate from Ms Ferguson dated 4 June, backdated to 4 May 2018. Mr Wilton said he has also been shown an email from Ms Ferguson to Mrs Thomson dated 7 May 2018 which he said appeared to be a response to issues raised by GT while conducting their review however he is instructed the email was never provided to GT or MEGC. 89

[97] Ms Ferguson was asked whether the medical certificate she provided dated 4 June clarified that she was both unfit for work and unfit to respond to the allegations. Ms Ferguson said there was also a letter from Dr Johnson stating they were unfit to respond. It was put to Ms Ferguson the letter from Dr Johnson was never provided to the College and she claimed her sister Debbie had forwarded the letter but she did not have evidence of that. 90

[98] Mrs Thomson claimed in her oral evidence that she had a medical certificate that she provided to Mr Donovan which she thought was dated 4 June. Mrs Thomson did not know whether the medical certificate was passed on to anyone. 91

Athletics Carnival 5 June

[99] The Respondent has claimed that the Applicants had breached a direction not to attend the workplace as contained in the show cause letter by attending the school athletics carnival. Ms Ferguson said she attended the College Athletes carnival as she had two sons competing and the venue of the carnival was not a workplace. 92 Mr Ferguson also said he attended the College athletics day to support his two children who attended the College at that time, and this was not a breach of the terms of his suspension as the carnival was not held at the College’s “workplace”.93 Given the location of the athletics carnival, it does not appear to be a breach of the direction.

6 June 2018

[100] Mr Wilton said that on 6 June he was informed by MEGC that Mr and Mrs Thomson and Ms Ferguson had engaged Australian Law Partners to act for them, and he was aware that Australian Law Partners wrote MEGC between 6 and 8 June regarding a number of matters, but did not address the show cause notices at all until 8 June. He said on 8 June he was informed by MEGC that Australian Law Partners wrote to MEGC on behalf of Mr and Mrs Thomson seeking an extension of time to respond to the notices issued to them, and he instructed MEGC that the request would be considered by the Board at a meeting scheduled for Monday 11 June 2018. Mr Wilton said no response to the notices was received from Mr or Ms Ferguson. 94

Board meeting 11 June

[101] Kimberley College submitted that throughout the review process that GT and the Board requested information and documentation from Mr Thomson, Mrs Thomson, Ms Ferguson and Mr Ferguson; and while some information was provided, many of the requested documents and information were not provided.

[102] Mr Wilton said that in respect of the three Applicants, only Mrs Thomson had requested an extension of time through her solicitor;she had provided no medical evidence to substantiate any alleged incapacity; and the request for an extension was very late. Ms Ferguson had not provided a response, and the medical certificate Ms Ferguson provided did not state she was unfit to respond to the notice as had been requested. The Board also noted that the solicitors engaged by Mrs Thomson had been corresponding with MEGC since 6 June, and Mrs Thomson had been present at meetings with Donovan Knapp on 22 and 28 May. The Board decided not to grant an extension. 95

[103] Mr Wilton then said the Board discussed whether it could make a decision at the meeting about the outcome of the notices. His evidence included that discussion occurred regarding matters in the first and second interim GT reports, significant damage occurring due to the social media campaigns.It was agreed that while the social media campaigns these were not helpful, they should not be taken into account. Mr Wilton said the discussion occurred over several hours and included a report from Mr Millard, a former school principal who was assisting the College during the suspension period. Mr Millard’s report was to the effect that many staff and parents were grateful for the removal of the Applicants from the school but were ‘fearful’ the matter was not finalised. Mr Wilton said that during the meeting Mr McAlpine, the Deputy Principal, contacted him to advise him he had received a phone call from Mr Thomson and Mr Wilton claimed Mr McAlpine advised him that Mr Thomson said that he and 14 other employees would be ‘receiving papers for defamation’. 96

[104] Mr Wilton said he did not recall if minutes were taken of the meeting. He said he believed the meeting occurred at the Business Centre at Logan Road at Loganholme, but he wasn’t sure. 97 During re-examination Mr Wilton said that he believed there are minutes for most if not all of the meetings, he just didn’t have them with him.98

[105] Mr Wilton said that the Directors decided that, on balance, the Applicants had engaged in conduct contained in the GT Reports, and given the conduct and position of trust the Applicants held in the College, the ongoing employment of the Applicants was impossible and their employment should be terminated. 99

[106] The Respondents submitted that in particular, the Board determined that the Applicants had put the College at significant risk, in that:

(a) The personal loan to Ms Ferguson may affect the College’s status as a charitable organisation;

(b) The failed payment and/or reporting of superannuation had resulted in the DPN’s being issued. In addition, failure to make other payments on time had resulted in the College incurring numerous interest and penalties;

(c) Ms Ferguson, in her role as CFO, had failed to maintain appropriate source documents to justify significant expenditure and other expenses which otherwise appeared personal in nature;

(d) Ms and Mr Ferguson had incurred extravagant expenses in the name of the KCFA;

(e) Ms and Mr Ferguson had received bank transfers into their personal bank accounts without any supporting paperwork;

(f) Mr Ferguson had been awarded a significant ‘back payment’ which was ostensibly used to repay Ms Ferguson’s personal loan with the College;

(g) Mr Ferguson had paid out his lease to Macquarie Leasing for his personal vehicle with the College;

(h) Mrs Thomson had been in control of the College ATM card which account had incurred significant expenses and cash withdrawals which could not be explained;

(i) The Applicants had benefited from various domestic and international vacations and travel, at the College’s expense; and

(j) The financial mismanagement had the potential to affect the College’s eligibility for government funding, and its accreditation with the QNSSAB.

Dismissal 12 June

[107] The three Applicants each received termination letters on 12 June. Ms Ferguson submitted that while on stress leave, she received notification on 12 June 2018 that she was dismissed, effective immediately.

Debit Card

[108] Mrs Thomson gave evidence that in her role as administration officer and personal assistant to the Principal, she did not have access to the College’s bank accounts, and she did not make any decisions in relation to the spending of College funds. 100

[109] Regarding the College’s debit card, Mrs Thomson denied that she held the card. Her evidence was that the debit card was kept in the office, and each time she used the card she obtained a receipt which was placed in the appropriate folder in the office. She stated that a number of staff used the card, “in lieu of a petty cash system”. 101

[110] Mrs Thomson accepted that she held the debit card in her office. It was put to Mrs Thomson that there was an amount of $117,000 including $10,000 in cash withdrawals without source documents. Mrs Thomson said she never used the card for personal use but sometimes purchased things for teachers. Mrs Thomson said sometimes teachers would forget to bring receipts to her but generally they would and she would put them in the drawer and take them to the administration office so Ms Ferguson could do bank reconciliations. Mrs Thomson said she did not know where the receipts are. 102

[111] It was submitted for Mrs Thomson in closing that the extent of her access to the finances of the College was limited to a debit card which was kept in her office and which was used by teachers and staff at the College for incidental expenses in lieu of a petty cash system. It was submitted that the location of the card and the PIN access number was widely known by the staff at the College 103 and that Mrs Thomson agreed that if people wanted to expend money on the debit card, Mr Thomson would tell them to get the card from Mrs Thomson and provide her with receipts.104

[112] Further it was submitted that there was evidence that staff did not always provide an invoice for their use of the card; based on Mrs Thomson’s evidence, occasionally teachers would continue to forget to bring receipts to her, but because Mr Thomson approved it, they knew what it was for, it was detailed in the statements and it wasn’t a major problem. 105

[113] Mr Cook said in response to the evidence of Mrs Thomson that during the review Mr Joseph, the accountant employed by the College, told him that the physical debit card linked to the College debit account was held by Mrs Thomson, and on that basis it was reasonable to assume Mrs Thomson had access to the use of the debit card, and a number of transactions from the debit card had no supporting documents including approximately $10,410 of ATM cash withdrawals.  106 It was put to Mr Cook that that card and PIN number were widely accessible and known by almost all staff. Mr Cook said that given how tightly held the finance functions were by the Thomson family, he did not believe it was readily circulated.107

[114] The Respondent submitted that Mrs Thomson acknowledged that she held the debit card and was responsible for collecting and providing receipts for expenditure on the card. Mrs Thomson alleged that various other employees would use the card, but submitted no evidence or witnesses to support the claim, and Mrs Thomson also claimed that the card was ‘not used for cash much’ and only ‘rarely for fast food’. 108

[115] However the Respondent says Mrs Thomson was unable to explain the evidence that that the card had been used for $10,410 cash withdrawals and $106,814 EFTPOS & Cheque payments for which there were no source documents, or why the source documents provided by Mrs Thomson to Mr Cook related to some legitimate College expenses, but other receipts related to cash withdrawals and fast food were missing as referred to in the evidence of Mr Cook. 109

[116] The Respondent also relies on the evidence of Mr Cook where he agreed that at no time did any member of staff mention to him that they had access to the debit card and PIN. 110

[117] Having considered all of the relevant evidence I am satisfied on the balance of probability that Mrs Thomson was knowingly involved in the inappropriate use of the debit card for personal benefit and other than for the benefit of the College.

Finland/UK trip

[118] Mrs Thomson gave evidence that she travelled as part of the UK/Finland trip. She gave evidence that on return, the “Thomson family” discussed the trip with their financial advisor, “to obtain information relating to what would be an appropriate contribution for the personal component of the trip”. She stated that they were advised 10% would be appropriate; however Mr Thomson “was adamant that we should pay more”. Mrs Thomson said her husband commenced paying $5,300.00 per pay to the College and continued this arrangement until their dismissal. Her evidence was that, in total, the family contributed approximately $140,000 towards the trip. Mrs Thomson said in response to the board stating the trip was unauthorised, she had never in her 18 years working for the College witnessed the Board authorising any payment to the College. 111

[119] Mrs Thomson said her husband, Mr and Ms Ferguson and their four children, and her other daughter Deborah, her husband and their two children also went on the trip. Mrs Thomson maintained in her oral evidence that all of the expenses incurred on the trip were for the College’s benefit. 112

[120] Mrs Thomson said that their financial adviser gave advice that only 10% of the trip was personal. It was put to her that the auditor determined the personal component was 55%. It was put to Mrs Thomson that no deductions have been made from Mr Thomson’s pay for a personal component of the trip, and the amount of $5,300 she referred to has always been deducted as super fund member contributions. Mrs Thomson appeared to accept she did not have evidence that the deductions occurred. 113

[121] When Mrs Thomson was asked why a personal component was not paid in advance she said because they didn’t know what it was going to cost. Mrs Thomson accepted the College paid for the personal component of the trip in advance. 114

[122] Ms Ferguson said she denied incurring travel expenses which the College did not benefit from, or that any expense would be considered “extraordinary”. 115 Ms Ferguson said herself, her husband and their four children attended the Finland and UK trip. She accepted during one of the six weeks that time was spent at the Northern lights in Finland, and that the College paid upfront for that. Ms Ferguson was asked if she had any evidence that the personal component of the trip had been repaid, and she maintained it had been withheld from her father Mr Thomson’s fortnightly pay. It was put to Ms Ferguson that the GT report recorded the amount as voluntary superannuation not paid to Mr Thomson. Ms Ferguson appeared to accept this was her understanding of how the personal component of this trip was being repaid.116

[123] Regarding the UK and Finland trip in 2016, Mr Ferguson conceded that a portion of the trip, which occurred after Finland, was “personal”. He stated this was acknowledged through “payment made by Mr Paul Thomson for the personal portion of the trip”. Mr Ferguson denied that the trip was “unauthorised”, stating that the Board was aware of this trip occurring, with email correspondence supporting such. 117

[124] Mr Ferguson said the trip was for the purpose of visiting multiple football academies but did not provide evidence of locations visited. Mr Ferguson was not sure why the personal component of the trip was paid for by the College upfront, but claimed it had been repaid. He initially did not accept he had obtained a personal benefit, or that having his children attend on the trip was a personal benefit, but then conceded that “in a fashion” it was. 118 Mr Ferguson had no evidence that the personal component of the trip had been repaid but said he had been told that.

[125] The Respondent submitted Mrs Thomson conceded during her oral evidence that she obtained a personal benefit when the College paid for her to attend a trip to Finland in 2016. 119

[126] The Respondent submitted that Mrs Ferguson admitted that she attended the Finland/UK trip in 2016 with her husband and four children, and that there was a personal component to that trip. Mrs Ferguson provided no evidence that that component had been repaid.

[127] The Respondent submitted that Mr Ferguson admitted that he attended the UK/Finland Trip in 2016, that a component of that trip was personal in nature, and that having the College pay the personal component ‘up front’ resulted in a personal benefit to him. 120 He did not agree that having the College pay for his children to attend the trip was a personal benefit to him.121

[128] I am satisfied on the basis of the evidence that on the balance of probability in connection with the Finland/UK trip all three Applicants were knowingly involved in the spending of school funds inappropriately for their own personal benefit and not for the benefit of the College.

China Trip

[129] Ms Ferguson confirmed that she, her husband and her children attended a trip to China for a football competition. It was put to Ms Ferguson that on 8 and 29 June a total of $60,000 was transferred into her joint account. Ms Ferguson accepted that she has provided no evidence as to how the $60,000 was spent. 122

[130] Mr Ferguson also stated that the 2017 China Tour was incorrectly referred to as “unauthorised by the board”. He gave evidence that he ran this tour for the football academy, “free of charge”. He said that the only expense to the College was airfares and three nights’ accommodation, prior to the commencement of the tournament. While some parents accompanied the students on this trip, Mr Ferguson’s evidence was that their accommodation and airfares were charged to their family accounts with the College. He gave evidence that “Amounts transferred to my joint account with Amy Ferguson were for the sole purpose of providing food and travel etc to the travelling party”. 123 He gave evidence that Mr Wilton as Chair of the Board, was aware of the trip and had carried out a drop to the airport.

[131] Mr Ferguson confirmed his family attended this trip. Mr Ferguson said he did not know why $60,000 was transferred to his personal account when Ms Ferguson had a college credit card. 124 He agreed he had not produced his personal bank account showing how the money was transacted. Mr Ferguson was asked how the $120,000 the College provided for this trip was spent. He said it would have been on flights, accommodation for three nights at Guangzhou and medical expenses.125

[132] The Respondent submitted that Mrs Ferguson admitted that she attended the China 2017 trip with her husband and four children, and provided no evidence as to how $60,000 transferred to her personal bank account, ostensibly for expenses in China, was expended on legitimate purposes.

[133] The Respondent submitted that Mr Ferguson admitted attending the China Trip 2017 with his wife and four children and said that the trip was offered to the College free of charge. It was put that Mr Ferguson could not explain why $60,000 had been transferred into his bank account ostensibly for the China trip, and did not produce any Exculpatory Material to show how those funds, or the additional $60,000 costed to the trip was expended, however Mr Ferguson was able to remember detailed non-financial information about the trip. 126

[134] I am satisfied on the basis of the evidence that on the balance of probability in connection with the China trip Mr and Mrs Ferguson were knowingly involved in the spending of school funds inappropriately for their own personal benefit and not for the benefit of the College.

Dubai trip

[135] Mrs Thomson gave evidence that $20,000 was deposited into her joint account with Mr Thomson, for the Kimberley College Football Academy’s Dubai tour, which they attended. She gave evidence that some money was deposited into Mr and Ms Ferguson’s joint account, and her own account, “due to our experience with overseas tours and the frequent blocking of bank cards when overseas transactions occur”. She stated this was a safety measure, to protect the “20 or more” children in their care. She stated the money was used for a bond on check in at the hotel, as well as for laundry, food, transport costs, “etc” while in Dubai. All receipts were kept and placed in the appropriate folder at the College.

[136] Mrs Thomson gave evidence that other College staff have had money deposited into their own accounts, for purchase of items for the college. She stated these teachers would have had approximately $50,000 each, paid into their personal accounts each year.

[137] Mrs Thomson said herself and her husband, as well as Mr and Mrs Ferguson and their four children, went on the Dubai trip. 127 Mrs Thomson accepted that she did not plead any evidence to show how $20,000 transferred from the school account into her joint account prior to the trip was spent.128

[138] Ms Ferguson confirmed she, her husband and her children attended a trip to Dubai for a football competition. Ms Ferguson accepted that $20,000 was transferred into her personal account on 29 March 2018. Ms Ferguson was not sure if any evidence had been provided as to how this money was spent. 129

[139] Mr Ferguson gave evidence that in early 2018, a budget for the football academy was submitted to the Board, which approved the subsidy for the tour to Dubai in March 2018. He again gave evidence that amounts transferred to his joint account with Ms Ferguson were used to provide “food and travel etc” to the travelling party.

[140] Mr Ferguson said his family attended this trip. Mr Ferguson was unable to provide evidence as to how the $20,000 transferred from the college account into his personal bank account on 29 March was spent. 130

[141] The Respondent submitted that Mrs Thomson provided no evidence to explain how $20,000 transferred to her bank account ostensibly for the Dubai 2018 trip was expended on legitimate College expenses. 131

[142] The Respondent submitted that Mrs Ferguson admitted that she attended the Dubai 2018 trip with her husband and four children, and provided no evidence as to how $20,000 transferred into her personal bank account, ostensibly for expenses in Dubai, was expended for legitimate purposes.

[143] The Respondent submitted that Mr Ferguson admitted that he attended the Dubai 2018 trip with his wife and four children, and could provide no Exculpatory Material to demonstrate how the $20,000 transferred to his bank account, ostensibly for the Dubai trip, was legitimately expended. 132

[144] I am satisfied on the basis of the evidence that on the balance of probability in connection with the Dubai trip all three Applicants were knowingly involved in the spending of school funds inappropriately for their own personal benefit and not for the benefit of the College.

Noosa Trip

[145] Mrs Thomson said her husband and herself, Mr and Mrs Ferguson and their (four) children went to Noosa in December 2017. 133 Mrs Thomson said no personal component was paid for this trip as her husband was entitled to sabbatical leave.134 Mrs Thomson did not appear to accept that she received an inappropriate personal benefit from the Noosa holiday.

[146] Ms Ferguson agreed that her, her husband and children attended a family holiday in Noosa in December 2017. She accepted that the holiday costs $21,449 and it was paid for with the College Credit card. Ms Ferguson said Mr Thomson had gone on holiday most years paid for by the College and it has always been in the audited accounts. Ms Ferguson said her family was “tagging along” and Mr Thomson would have gone whether they were there or not. Ms Ferguson was asked whether Mr Thomson would have hired a five bedroom home (if they were not there) and she answered “Probably”. Ms Ferguson also accepted that a further $5000 dollars was charged to the College for a cleaning fee. 135

[147] The Respondent submitted Mrs Thomson conceded during her oral evidence that she obtained a personal benefit when the College paid for her to attend a holiday in Noosa. 136 The Respondent submitted that Mrs Ferguson admitted that she attended the Noosa holiday in 2017 with Mr Ferguson and their four children, and that the cost of this holiday was paid for by the College credit card in the amount of $21,449.

[148] I am satisfied on the basis of the evidence that on the balance of probability in connection with the Noosa holiday all three Applicants were knowingly involved in the spending of school funds inappropriately for their own personal benefit and not for the benefit of the College.

Planned Spain and Sweden Trip

[149] Ms Ferguson confirmed that she, her husband and her children were booked to attend the Spain and Sweden trip for a football competition, which was ultimately cancelled. It was put to Ms Ferguson that Mr Cook’s evidence would be that had the trip proceeded, the costs would have exceeded $800,000. Ms Ferguson said 80 people were going on the tour, but that the costs of Mr and Mrs Thomson, herself and the children would have been paid for themselves.

[150] Mrs Thomson was asked why Mr Ferguson said in his statement that Mr and Mrs Thomson booked the prestige junior suite at the Sofitel Biarritz. Mrs Thomson said that would have been on the assumption that they were going to pay for it. 137 It was put to Mrs Thomson that the College paid for the accommodation on 29 March and Mrs Thomson said they were intending to pay it back at the end of the trip.138

[151] It was put to Ms Ferguson that the school prepaid $116,000 for the Sofitel Biarritz, $126,000 for Cruise Republic, $152,000 for Radisson Blu and about $55,000 to Flight Centre. Ms Ferguson was not sure if this was correct. Ms Ferguson accepted that she made a bank transfer of $100,000 for the cruise on 9 March. Ms Ferguson accepted that she created a personal bank account for parents to make payments into if they wished to attend the tour, and explained this was because the Board was refusing to speak to them about the tour or give an answer as to whether it was going ahead. 139

[152] Mr Ferguson said that the football academy were to go on a tour of Spain and Sweden on 26 June 2018. Mr Ferguson’s evidence was that Kimberley College did not pre-pay all flights and accommodation for this tour, as claimed in the interim report. Mr Ferguson stated that GT disclosed the accommodation location and costs, but failed to state how many travellers the accommodation was for, which led to the general public inferring the accommodation was “lavish, exorbitant and unnecessary”. Mr Ferguson’s evidence was that there were 83 travellers, and that the cost of the accommodation in Spain and the Cruise was reasonable.

[153] Mr Ferguson gave evidence that the travellers were participating in a cruise as it was a “cheap option at around $1,000 per person for the week, which included accommodation, meals and activities”. He gave evidence that each student player was paying $3,000 for the trip, and each adult $6,000.

[154] It was put to Mr Ferguson that the College prepaid about $450,000 towards travel and accommodation for this trip and he said he did not know, 140 but accepted that the College prepaid for a portion of the costs of the trip.141

[155] Mr Ferguson was asked why he provided his personal bank account details to a parent for the purpose of paying the tour fee. He said because there was a lot of animosity between the Principal and the Board and in order to make sure the tour went ahead they made the decision to allow parents to pay them to make sure all items for the tour were paid for. He said either he or Ms Ferguson made that decision. 142

[156] Mr Cook said after preparing the second interim report GT he was provided by MEGC further documents relating to additional expenses and bookings for the Spain and Sweden trip showing approximately an additional $260,000 for accommodation, which had been booked out but not paid for by the College. Further, the total cost of the flights for the trip to Spain and Sweden in June 2018 appear to have been in the amount of $331,651, which included two First Class airfares of approximately $16,604.00 per ticket. 143

[157] Mr Cook said taking into account reservations previously disclosed in the interim reports, the total cost of the planned trip to Spain and Sweden in June 2018 appeared to have been in excess of $800,000. Mr Cook provided a copy of what he said were various expenses incurred or committed to in relation to the Dubai trip, Spain and Sweden trip, as well as other expenses incurred after March 2018 which appear to be associated with the Dubai trip. He said he understood the bulk of these expenses were incurred by the College after Ms Ferguson removed Mr Cyril Joseph’s access to view the College bank accounts. 144

[158] Mr Cook said that despite GT’s requests, no records were provided by Ms or Mr Ferguson or anyone else regarding contributions they allege that they made towards the trip, and during the review no documents were located or provided to GT regarding these alleged contributions. Mr Cook said that GT was provided with a copy of an email from Mr Ferguson to a parent instructing the parent to make payment directly into Ms Ferguson’s personal bank account, and GT was not provided with any explanation or evidence why the payment was requested to be paid directly to Ms Ferguson’s personal account and not the College account.

[159] The Respondent submitted that Mrs Ferguson admitted she was booked to attend the Spain/Sweden trip with her husband and four children, and confirmed that the costs of attending the trip for herself and her children were personal in nature. In her evidence she said the costs for herself and her children would have been paid for by themselves. 145

[160] The Respondent submitted that Mrs Ferguson admitted that she and Mr Ferguson created a bank account in their own names, and directed parents to pay the parent/student contribution for this trip into this bank account. It is evident from the transcript that Mrs Ferguson did accept this is what occurred. 146

[161] The Respondent submitted that Mr Ferguson admitted that he provided his own bank account details to parents to deposit their portion of the payment for the trip, that the reason the College account was not provided for payment was animosity with the Board, and that he and Ms Ferguson made the decision to provide their own bank account details despite the College having expended $450,000 on payments for the trip. 147 The Respondent submitted Ms Ferguson has not explained why the College paid €10,725 towards her accommodation for the Spain/Sweden 2018 trip which she acknowledged was a personal expense.148

[162] I am satisfied on the basis of the evidence that on the balance of probability in connection with the planned Spain and Sweden trip each of the three Applicants was knowingly involved in both the spending of school funds, and intended future spending of school funds inappropriately for their own personal benefit and not for the benefit of the College.

Personal Loans and Back Pay

[163] Ms Ferguson’s evidence was that she was aware that in June 2016, the “Thomson family” received pay increases. In regard to these increases, Ms Ferguson gave evidence that they were the result of an independent person, who had experience with educational remuneration, reviewing the salaries. She stated the Board had never reviewed the remuneration to employees, and that “they” felt it was appropriate for an external party to undertake the review. 149

[164] Ms Ferguson said no loans have ever been provided to Mr Ferguson or Mrs Thomson by the College, and that she obtained a loan from the College in 2012 for “personal reasons”, and the loan has been fully repaid. 150

[165] It was put to Ms Ferguson that on 31 January 2017 an amount of $55,644 was paid from the College Bank account to settle her husband’s loan with Macquarie Leasing and she agreed with that, and agreed that they had received financial advice from Ms Postle, a Financial Planner to pay the loan. 151 Ms Ferguson agreed that the transaction was allocated against her college loan account. Ms Ferguson was asked who benefited from this loan being paid and she answered herself and her husband.152 Ms Ferguson claimed that the loan had been repaid however when asked if she had any evidence of that she was unable to provide any.153

[166] Ms Ferguson agreed that in November 2012 she was given a loan of $100,000 by the College, and a further amount of $30,010 was paid to Gadens Lawyers. Ms Ferguson said this related to a personal matter and accepted that they did not benefit the College. 154

[167] Ms Ferguson appeared to accept that she also received loan amounts from the College of $5000 on 19 November 2012; $10,000 on 1 November 2013; $12,000 on 10 December 2013; $12,750 on 3 February 2014; $40,000 on 14 February 2014; $17,000 on 28 February 2014; $15,000 on 4 March 2014; $10,000 on 4 April 2014; $3,000 on 17 April 2014; $32,000 on 26 April 2014; $8,000 on 25 July 2014; $8,000 on 1 August 2014; $3,000 on 29 August 2014; $1,000 on 1 September 2014; $12,000 on September 2014; $6,000 on 26 September 2014; $2,000 on 1 October 2014; $7,000 on 10 October 2014; $4,000 on 31 October 2014; $16,000 on 1 December 2014; $12,000 on 3 December 2014; amounts of $5,000 and $20,000 in 2015 and $8,276.95 in 2016 to Macquarie Leasing for a Mini. Ms Ferguson said these payments were booked to her personal loan. 155

[168] Ms Ferguson accepted that both herself and Mr Thomson had substantial loan balances with the College in 2016. Ms Ferguson also appeared to accept that the loans were the subject of attention from the College auditors. 156 It was put to Ms Ferguson that information she gave to the auditor that Mr Ferguson had not had a payrise in four and a half years was false. A series of pay increases awarded to Mr Ferguson since his commencement was recited to Ms Ferguson and she did not dispute these increases had occurred.157 Ms Ferguson said she was probably talking about pay increases in regard to additional duties.158

[169] When Ms Ferguson was asked about how Ms Postle arrived at the proposed calculations for pay increases to be awarded, Ms Ferguson said she did not have this evidence as it was stored on a her computer at school and that information went to the auditor, and Ms Postle was not cooperating with them. 159

[170] It was put to Ms Ferguson that on 12 July 2016 a payment was made to her husband Mr Ferguson from College funds and he received a net amount of $237,626, and on 21 July 2016 $218,000 was transferred back to the College and she accepted that, and she also accepted that on 31 December 2016 that $218,000 was allocated to pay off her own outstanding personal loan to the College. 160

[171] It was put to Ms Ferguson that the back pay was a strategy and a tactic to settle her personal loan questioned by the auditors, and Ms Ferguson responded that her husband deserved the back pay. 161 Ms Ferguson agreed that Ms Helen Postle is a financial planner from a firm named Hillross, and that Ms Ferguson employed Ms Postle in a personal capacity, and Ms Postle was not employed by the College.162 Ms Ferguson agreed Mr and Mrs Thomson also engaged Ms Postle. Ms Ferguson appeared to accept that Ms Postle reviewed salaries in 2016 however she claimed Mr Hollett was also involved but there was no evidence to support that.163

[172] It was put to Ms Ferguson that Mr Cook’s evidence will say that between 2 January 2017 and 31 August 2017, $131,692 was transferred from the College bank account to her personal joint account. Ms Ferguson said she was not sure what it was made up of. 164 It was put to Ms Ferguson that Mr Cook made several requests, including one by email on 9 May 2018165 for various source documents. Ms Ferguson claimed she had not seen the email.

[173] It was put to Mr Ferguson that Mr Cook will say that between 2 January 2017 and 31 August 2017 $131,000 was transferred from the College bank accounts to his personal joint account. Mr Ferguson said he would have to see the evidence. 166 Mr Ferguson accepted he had received one request for supporting documentation and he couldn’t say whether the documents were provided. It was put to Mr Ferguson that a copy of a reimbursement claim attached to Mr Cook’s evidence shows a significant proportion of expenditure for fast food and takeaway stores. Mr Ferguson could not explain this.167 Mr Ferguson gave evidence that any reimbursements paid to him were valid claims for reimbursement of the purchase of school items, using his personal money.

[174] Mr Ferguson’s evidence was that, regarding the “Macquarie Leasing” loan, this was paid in his name “Upon the advice of our financial advisor”. He stated that the advisor was “an independent financial professional”, and that the amount was paid back in full, with interest, a few months later. He stated repayment of the loan is reflected in the 2016 “audited financial statements”. His evidence was that he did not realise this could be considered “wrongful use of school funds”, given interest was paid on the amount. 168

[175] Mr Ferguson confirmed Ms Ferguson made a payment of $55,644 on 31 January 2017 from college funds to settle his personal vehicle loan. 169 He agreed Ms Postle was the financial advisor who advised him to pay the loan from college funds. Mr Ferguson said Ms Postle did not work for the school. He accepted he benefited from the College making the payment.170 Mr Ferguson was asked why the payment was not recorded as a loan to him and why it was recorded as a loan to his wife and he said he did not know.171 Mr Ferguson accepted that he had provided no evidence that the loan had been repaid.172

[176] In relation to the substantial pay increases Mr Ferguson gave evidence that after seeking financial advice, the Thomson family was advised their income was inappropriate given their hours of work, and duties at the College. Mr Ferguson stated he was not involved in the “calculation or transaction” relating to his back pay, it was simply received to his bank account. Mr Ferguson gave evidence to the effect that given his duties equated to more than the duties of one employee, that he should have been financially compensation for this. 173

[177] Mr Ferguson accepted that he had received a series of salary increases and back pays during his employment. 174 It was put to Mr Ferguson that on 3 June 2016 he received a back payment of $350,000 and he was asked if it was his evidence that he had no participation in that. He replied that was correct, and that he did not calculate it, did not request it, and he did not know the basis that it was determined. He also said he was not surprised by the amount.175

[178] Mr Ferguson maintained Ms Postle, Ms Ferguson and Mr Schutters were involved in calculating the back pay. 176 Mr Ferguson appeared to accept that on 12 July 2016 he received a net payment of $237,626 into his bank account and then nine days later $218,000 was transferred back out of his joint account into the college account. He said he was not sure what the payment was for and it would have been made by Ms Ferguson.177

[179] Mr Cook said in response to the statement of Mr Ferguson that sufficient supporting documents were not provided for each reimbursement to Mr and Ms Ferguson’s bank account despite numerous requests. He said there was no evidence of how expenditures were for the College’s benefit, including significant expenditure at fast food and takeaway stores such as McDonald’s, Oporto and Zarraffa’s Coffee and other transactions at BCF and BWS liquor which appear to be for personal use. 178

[180] Mr Cook said that shortly after 12 June 2018 GT was provided with various email records between Ms Ferguson and Mr Mark Schutters, an accountant of Dickenson’s Accounting, and also between Ms Ferguson and Ms Helen Postle, a financial planner from Financial Design and/or also known as Hillross Springwood. Mr Cook said that during the review Mr Wilton advised GT the Board did not receive any request to approve back pay. 179

[181] Mrs Thomson’s evidence was that she believed the back pay she received was reasonable, considering her work hours and duties at the College. She stated, however, that she was not involved in the calculation or processing of this amount, she merely received it to her account. She stated she did not receive “a bonus”. 180

[182] It was put to Mrs Thomson that she had received numerous back payments, and long service leave upon her resignation in 2016, and then she was re-employed and her salary was increased from $80,000 to $115,000, then $120,000. Mrs Thomson maintained this was reasonable, 181 and that it was her husband Mr Thomson who authorised these payments to her.182

[183] The Respondent submitted that Mrs Ferguson admitted that between 2 January 2017 and 31 August 2017, an amount of $131,692 had been transferred from the College bank account to Mrs Ferguson’s bank account and referred to her responses to that proposition during her oral evidence which appear to concede that was the case. 183 The Respondent says Mrs Ferguson submitted no evidence to demonstrate how these funds had been expended on legitimate College expenses, including her own bank statement showing the relevant transactions.

[184] The Respondent submitted that Mrs Ferguson admitted in January 2017 she transferred $55,644 from the College account to settle Mr Ferguson’s loan with Macquarie Leasing. It is evident from the transcript that this is correct. 184 The Respondent says Mrs Ferguson denied any knowledge of that amount being placed against her loan account with the College. Ms Ferguson admitted Mr Ferguson received a benefit from having the loan repaid. Ms Ferguson was unable to produce any evidence, even personal bank records, to demonstrate that the loan had been repaid as asserted by her.185

[185] The Respondent submitted that Ms Ferguson admitted that she received the benefit of a series of ‘personal loans’ made to her from College funds from about 2012, and that the loans did not benefit the College in any way. The Respondent submitted that Mrs Ferguson admitted that questions had been asked by the regulators and auditors about the loans, and that “we were concerned it [the loans] may affect us in the future.” 186

[186] The Respondent submitted that with regard to emails annexed to the statement of Mr Cook exchanged between Mrs Ferguson and Ms Helen Postle, and Mr Schutters 187, Mrs Ferguson stated that in her view Mr Ferguson “deserved the $350,000 back pay” that Mr Ferguson made a ‘personal decision’ to use his back pay to repay her personal loan with the College, 188 and could not explain why the net value of the back pay amount, after tax, was the same amount required to pay her loan.189

[187] The Respondent submitted on the basis of the evidence of Mr Ferguson 190 that he did not request to see the back pay, and said the back pay had been of no benefit to him. Further, it was submitted that he was not involved in the calculations and that this was undertaken by Mrs Ferguson, Ms Postle and Mr Schutters. Mr Ferguson said that he did not make the repayment of $218,000 to the College nine days after receiving the back pay, which was used to settle Mrs Ferguson’s loan, but that Ms Ferguson made the transfer, which he did not question.

[188] The Respondent says that with regard to the $131,000 of reimbursements made to Mr Ferguson’s bank account, which were predominantly for takeaway and fast food, Mr Ferguson confirmed that Mr Cook had requested the source documents in relation to those reimbursements, but he could not ‘honestly say’ whether that Exculpatory Material had been provided. 191

[189] The Respondent submitted that on 31 January 2017 Mr Ferguson’s loan of $55,644 with Macquarie Bank was paid out with College funds, and that he received a personal benefit from this transaction. The Respondent said that Mr Ferguson stated that the loan was repaid a few months later with interest, but did not know who calculated the interest, or the amount repaid to the College. The Respondent submitted that Mr Ferguson was unable to provide any Exculpatory Material to confirm the amount had been repaid. 192

[190] I am satisfied on the basis of the evidence that on the balance of probability Mr and Ms Ferguson were knowingly involved in the spending of school funds inappropriately in connection with the transfer of an amount of $131,692 from the College to their own account between 2 January 2017 and 31 August 2017, and at least a substantial proportion of this was not genuine reimbursement of legitimate costs incurred but was done for their own personal benefit and not for the benefit of the College.

[191] I am satisfied on the basis of the evidence that on the balance of probability Mr and Ms Ferguson were knowingly involved in the spending of school funds inappropriately by using school funds for the purpose of repaying Mr Ferguson’s Macquarie Leasing loan and this was done for their own personal benefit and not for the benefit of the College. It is also appears more likely than not from the evidence that contrary to the claims of the Applicants this loan has not been repaid.

[192] I am satisfied on the basis of the evidence that on the balance of probability Ms Ferguson was knowingly involved in the spending of school funds inappropriately by using school funds for the purpose of series of ‘personal loans’ made to her from College funds from about 2012, and that the loans were for her own personal benefit and not for the benefit of the College.

[193] I am satisfied on the basis of the evidence that on the balance of probability Mr and Mrs Ferguson were knowingly involved in the spending of school funds inappropriately by participating in the engineering of a sham back pay arrangement with the assistance of a financial planner Ms Postle for the purposes of repaying her personal loan debts with the College.

[194] I am satisfied on the basis of the evidence that on the balance of probability all three Applicants were knowingly involved in the spending of school funds inappropriately for purposes of obtaining unreasonable increases to their salaries.

Long Service Leave

[195] The Respondents submitted that Mrs Thomson resigned in August 2016 and was paid out her long service leave in the amount of $33,950.00, and subsequent to her termination Mrs Thomson claimed she was owed 862 hours of long service leave. Further, it was submitted that Ms Ferguson attempted to defraud the College in favour of her mother Mrs Thomson, by paying out the long service leave at a rate higher than her rate of pay at the time of her resignation.

[196] Mrs Thomson was asked why she resigned in August 2016 and she responded that Mrs Postle was trying to help out with their personal life and that was her recommendation. Mrs Thomson claimed she could not remember why Mrs Postle gave that advice but accepted that she was paid long service leave of approximately $33,000 dollars. It was put to Mrs Thomson that she had claimed in her pleadings that she hadn’t received her long service leave. Mrs Thomson said in her evidence she had forgotten. 193

[197] It was put to Ms Ferguson that she claimed an entitlement to 800 hours long service leave after she had already been paid $28,000 in long service leave. Ms Ferguson said she did not stop and try and figure out what was owed to her, she just used the figures the school had, but in hindsight maybe she would have known it was a little too much. 194

[198] Mr Cook also said that GT was not provided with and did not locate any work papers that supported the accrued leave balances in the audited financial reports provided to GT.

[199] I am satisfied on the balance of probability that both Ms Ferguson and Mrs Thomson would have been aware at the time that they claimed payment for accrued long service leave on termination that payments had already been made for claimed amounts.

Events Post Termination

[200] Kimberley College submitted that after the Applicants’ employment was terminated, the following occurred:

(a) The QNSSAB conducted an independent review of the governance and financial arrangements of the College and on 3 August 2018 and 7 September 2018, the Board received notices from the QNSSAB asking the Board to show cause why its accreditation and funding for primary and secondary education at the College should not be withdrawn;

(b) On 22 August 2018, the Board received a show cause notice from the Department of Education and Training proposing to delay any further funding in respect of College;

(c) On 14 September 2018, the Board received a show cause notice from the ACNC noting that it was commencing a preliminary enquiry into the College’s compliance with the Act.

[201] Mr Wilton said that GT provided their final report to the Board on 13 August 2018. 195 Mr Wilton gave evidence that other matters have come to light since the Applicants’ termination. These include a meeting on 12 June 2018 attended by Ms Ferguson which supports the conclusion that Ms Ferguson could have responded to the show cause notice, Mrs Thomson’s claim for long service leave despite having already been paid for long service leave, extravagant travel, employment of a foreign national without visa rights, an Independent Review by NSSAB and subsequent show cause concerning the College’s accreditation, and a further show cause from the Department of Education concerning further payments to the school from the State of Queensland. Mr Wilton said the school had also received a show cause from the ACNC on 14 September 2018 concerning compliance with the Australian Charities and Not-for-profits Commission Regulation 2013.196

[202] Mr Cook said that on 13 August 2018 GT provided its final report to MEGC. 197 Further to the earlier interim reports the final report determined $723,439.96 in outstanding superannuation payments owing to College employees dating back to 2012 not including interest or charges that may be imposed by the ATO. Further the College had outstanding FBT returns for the FBT years ending 2016, 2017 and 2018. The estimated FBT liability for the FBT Return for the year ending 31 March 2017 was estimated to be $204,731 which was largely a result of unauthorised travel expenditure and other employee benefits which had been expensed in the Company’s financial statements for the year ended 31 December 2016 including the trip to Finland and the United Kingdom Trip as disclosed in the auditors notes for the financial year ended 31 December 2016.198

[203] Mr Cook said as a result of missing source documentation for various transactions in 2016 and 2017 financial years there has been significant delays to preparing and finalising the financial statements resulting in being unable to complete the 2017 audit and lodge with ASIC by the due date of 30 June 2018. He referred to failure to maintain adequate records in relation to GST, FBT or income tax being a potential breach of the Income Tax Assessment Act 1936 and A New Tax System (Goods and Services Tax) Act 1999. 199

[204] Mr Cook expressed the view that Ms Ferguson was a de-facto Director of the College, and that Mr Thomson and Ms Ferguson acted as shadow/de-facto directors of the Company and accordingly owe all the legal obligations, duties, responsibilities and liabilities that attach to any other directors of the Company. 200 Mr Cook went on to express his view that Ms Ferguson as a de-facto director had obligations under the Corporations Act 2001(Cth) and the Education Act 2013 (Cth) and was in breach of those obligations including, in the case of the Corporations Act, the duty to act in good faith and not misuse her position, and in the case of the Education Act to spend funding provided under that Act for the purpose of education, and maintain proper records regarding the financial administration of the school.201

[205] Mr Cook accepted that it was largely correct to say that there had never been Board approval for financial expenditure during the review of report of company records. 202 Mr Cook accepted that there had been failings at the Board level and management level.203

[206] The Respondent submitted that it also became aware Ms and Mr Ferguson had employed a foreign national, Angel Garcia, who did not have visa rights to work in Australia or hold a blue card (required to work at school). The Respondents submitted that Ms Garcia was provided with accommodation, a mobile phone, fully maintained motor vehicle, flights to and from Madrid and a $117,096.00 annual salary. It was submitted that the salary was paid from Ms and Mr Ferguson’s personal bank account.

Harsh, Unjust or Unreasonable

[207] In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable the Commission must take into account a range of matters set out at s.387 of the Act.

Valid Reason

[208] In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded” 204 and should not be “capricious, fanciful, spiteful or prejudiced.”205 However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.206

[209] The Respondent submitted that there was a valid reason related to each of the three Applicant’s conduct. For there to be a valid reason related to the Applicant’s conduct, I must find that the conduct occurred and justified termination.²⁰⁷ The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.” 208

[210] The Applicants have submitted that they did not engage in the alleged serious misconduct, or any other misconduct which would warrant a dismissal. 209 They have said there were no formal procedures in place for the financial management of the College, including based on evidence of Mr Cook210 no proper receivables policy, nor was there any query or criticism raised by the Board members about the financial management of the College prior to the audits of the College undertaken by the ATO in late 2017.

[211] The Applicants submitted that they were never provided with a contract of employment setting out their employment responsibilities. Further, the Applicants submit that there is no evidence before the Commission that any of the decisions of the Board, from the appointment and instruction of their solicitors, the engagement of GT Advisory and Consulting, or the decision to suspend and terminate the employment of the Applicants was made with the proper authority of the Board. 211

[212] It was argued for the Applicants that the letters dated 1 June 2018 were vague and unclear, and on their evidence at the time of receiving them each of the Applicants were on stress leave. 212 Further, and as a result of this, as well as the fact that the Applicants had been required to respond to extensive allegations within one week, Mrs Thomson, by her solicitors, Australian Law Partners, sent a letter to MEGC requesting an extension of time to respond to the suspension letters.213 It is argued that the Board rejected this request without a proper basis.

[213] It is submitted that the Respondents expert agreed that there was no delegation of authority policy which would clearly outline the roles and approval limits of various key management and board members; and the financial management of the school was essentially the Wild West. 214

[214] It was submitted for Mr Ferguson that he did not have access to, or control over, the financial resources of the College, and there was no allegation of poor conduct or disciplinary issues against Mr Ferguson before his termination. 215

[215] I have already made a series of findings on the balance of probability in the body of this decision including that;

•  Ms Ferguson was the CFO of the College until at least late April 2018;

•  Ms Ferguson retained responsibility for matters concerning superannuation up to and including the time the DPN’s were issued by the ATO;

•  Ms Ferguson was attempting to limit the extent of knowledge concerning these payments made in connection with a planned overseas trip by removing access of the accounts team to online banking;

•  Mrs Thomson was knowingly involved in the inappropriate use of a College debit card for personal benefit and other than for the benefit of the College;

•  In connection with the Finland/UK trip all three Applicants were knowingly involved in the spending of school funds inappropriately for their own personal benefit and not for the benefit of the College;

•  In connection with the China trip Mr and Mrs Ferguson were knowingly involved in the spending of school funds inappropriately for their own personal benefit and not for the benefit of the College;

•  In connection with the Dubai trip all three Applicants were knowingly involved in the spending of school funds inappropriately for their own personal benefit and not for the benefit of the College;

•  In connection with the Noosa holiday all three Applicants were knowingly involved in the spending of school funds inappropriately for their own personal benefit and not for the benefit of the College;

•  In connection with the planned Spain and Sweden trip all three Applicants was knowingly involved in both the spending of school funds, and intended future spending of school funds inappropriately for their own personal benefit and not for the benefit of the College;

•  Mr and Ms Ferguson were knowingly involved in the spending of school funds inappropriately in connection with the transfer of an amount of $131,692 from the College to their own account between 2 January 2017 and 31 August 2017, and at least a substantial proportion of this was not genuine reimbursement of legitimate costs incurred but was done for their own personal benefit and not for the benefit of the College;

•  Mr and Ms Ferguson were knowingly involved in the spending of school funds inappropriately by using school funds for the purpose of repaying Mr Ferguson’s Macquarie Leasing loan and this was done for their own personal benefit and not for the benefit of the College and that it appears the loan has not been repaid;

•  Ms Ferguson was knowingly involved in the spending of school funds inappropriately by using school funds for the purpose of series of ‘personal loans’ made to her from College funds from about 2012, and that the loans were for her own personal benefit and not for the benefit of the College;

•  Mr and Mrs Ferguson were knowingly involved in the spending of school funds inappropriately by participating in the engineering of a sham back pay arrangement with the assistance of a financial planner Ms Postle for the purposes of repaying her personal loan debts with the College;

•  All three Applicants were knowingly involved in the spending of school funds inappropriately for the purpose of obtaining unreasonable increases to their salaries;

•  Ms Ferguson and Mrs Thomson would have been aware at the time they claimed payment for accrued long service leave on termination that payments had already been made for amounts claimed.

[216] On the basis of these findings it is abundantly clear without the need for any further consideration that the Respondents had a valid reason to terminate each of the three Applicants and that is what I find. I have not proceeded by making findings about the broadly stated reasons as expressed in the three termination letters of 12 June 2018 concerning alleged breaches of the Corporations Act 2001 (Cwth), and of the Australian Education Act 2013 (Cth). It is unnecessary for me to draw conclusions on those matters which may be dealt with in another place and it is sufficient that I find there is a valid reason in each case. My findings are consistent other reasons expressed in each of the termination letters.

[217] In any event the reasons for termination need not be that given by the employer, it can be any reason underpinned by evidence provided to the Commission. 216 For completeness I will add that there are other reasons that make clear the Respondent had a valid reason for the dismissals including;

•  In the case of Ms Ferguson, the incompetent manner in which the Colleges’ affairs were managed demonstrated by the unavailability of source documents and adequate record keeping, non-compliance and lack of documentation including tax invoices and receipts;

•  The failure of Ms Ferguson to correctly complete the superannuation returns causing the College to pay a shortfall of hundreds of thousands of dollars plus interest;

•  The failure of all three Applicants to fully cooperate with the review conducted by GT.

Were the Applicants notified of the reasons for their dismissals?

[218] The Applicants submit that the allegations were vague and that the Applicants each individually submitted that they did not understand the allegations. 217 Kimberley College submitted that the Applicants were notified of the reasons for their dismissals as follows:

•  On 1 June 2018, the Board’s solicitors provided Mr Thomson’s solicitors (which had previously accepted correspondence on behalf of the Applicants) with a full copy of the Second Report;

•  On 1 June 2018, the Board resolved to suspend the Applicants’ employment; and

•  On 3 June 2018, the Applicants were each provided a Show Cause letter, setting out the allegations of misconduct and containing relevant extracts from the Second Report detailing their alleged misconduct, and advising the College was considering terminating their employment. 218

[219] Kimberley College submitted that the provision of the Show Cause letters satisfied the requirement for notification. Further, the reasons for the dismissals were confirmed in the termination letters of 12 June 2018. 219

[220] I am satisfied that each of the Applicants were notified of the reasons for their dismissal and that the reasons as given were sufficiently clear that the Applicants could have understood the gravamen of what they were being terminated for and therefore reject an argument, if it is being argued, that the Applicants were not properly notified because they didn’t understand the reasons.

Were the Applicants given an opportunity to respond to any reason related to their conduct?

[221] In order to be given an opportunity to respond, the employee must be made aware of allegations concerning the employee’s conduct so as to be able to respond to them and must be given an opportunity to defend himself/herself. As Justice Moore has stated, “the opportunity to defend, implies an opportunity that might result in the employer deciding not to terminate the employment if the defence is of substance. An employer may simply go through the motions of giving the employee an opportunity to deal with allegations concerning conduct when, in substance, a firm decision to terminate had already been made which would be adhered to irrespective of anything the employee might say in his or her defence. That… does not constitute an opportunity to defend.”²²⁰

[222] The requirements of s.387(c) of the FW Act will be satisfied “[w]here the employee is aware of the precise nature of the employer's concern about his or her conduct or performance and has a full opportunity to respond to this concern…”²²¹

[223] The Full Bench of the Fair Work Commission has held that s.387(c) of the FW Act is to be applied in a common sense way to ensure that the Applicant has been treated fairly and does not necessarily require formality in the sense of conducting a meeting with the employee to inform the employee of the reasons for the proposed dismissal or providing the employee with an opportunity to address the employer’s concerns in writing.²²²

[224] The Applicants submit that that they were not given adequate notification of their termination or provided adequate opportunity to respond to the reasons. In her oral evidence Mrs Thomson appeared to indicate she could respond to allegations if they were specific, but some were vague. Ms Thomson also said she understood the allegation that she had breached her duties by spending and committing to spend funding provided under the Act for purposes other than providing school education. 223

[225] Ms Ferguson said that in response to the Board’s denial of an extension request, her being on stress leave denied her the opportunity to “participate” in the review or provide a response to the interim report. Ms Ferguson also said she disputed that GT Advisory was independent. 224

[226] Mr Ferguson claimed that he had every intention of responding to the interim report and requested a short extension but was denied that opportunity. 225 It was put to Mr Ferguson that he did not request an extension of time. He said as far as he understood a request for an extension was put forward by himself or his wife in an email. He was unable to provide the email.226

[227] Mr Ferguson submitted that his General Practitioner sent a letter to Kimberley College advising the situation had caused him stress and anxiety. Mr Ferguson submitted that accordingly it was unreasonable for Kimberley College to expect him to provide a response to the allegations, while he was suffering in this manner. He submitted that the Respondent, therefore, did not provide him a sufficient opportunity to respond to the allegations, and he was denied procedural fairness. 227

[228] Ms Ferguson submitted that Kimberley College sent her a letter on 2 May 2018, regarding her wellbeing, and advising she should not “carry out or undertake any work”, and should not concern herself with “issues that may contribute to her stress levels and consequent health issues”. Ms Ferguson submitted she received her show cause notice on 3 June 2018, requiring a response to the allegations against her within 5 days. She submitted that as Kimberley College understood she was unwell, the College requested on 4 June 2018 that she provide a medical certificate to confirm she was unfit to respond to the allegations. She provided a medical certificate on 5 June 2018; however, she submitted that despite providing such, and without her providing any response to the allegations, her employment was terminated on 12 June 2018. Ms Ferguson submitted that she therefore was not provided the opportunity to respond, and was denied procedural fairness. 228

[229] Mrs Thomson submitted she was provided a show cause notice from Kimberley College on 3 June 2018, requiring a response to the allegations against her within 5 days. She submitted that on 8 June 2018, she sought an extension for providing her response, however this was refused by Kimberley College. She submitted that during this week she provided a medical certificate to the College, providing that she was suffering from “work related stress” which rendered her “unfit for duty up to and including 19 June 2018”. Mrs Thomson submitted that accordingly, it was unreasonable for her to provide a response to the allegations, due to her condition. She submitted that the Respondent failed to provide her with an opportunity to respond to the allegations, and that she was denied procedural fairness. 229

[230] The Applicants also submitted that the Respondent had made up its mind before the letters of termination were sent, as the footer to the letter outlining the reasons for suspension pre-dated the Second Interim GT Report, indicating that the decision to terminate the employment was made well before any opportunity to respond was provided to the Applicants.

[231] The Applicants say that the intention of the Board was to remove each member of the Thomson/Ferguson family without allowing them proper explanation, an opportunity to respond, procedural fairness, or recourse and that it was decided that the entire family, regardless of what they had done, or failed to do, had to be removed. 230

[232] The Respondent submitted that Mrs Thomson confirmed that the Second Interim report contained only a “couple of allegations” which involved her, and while she did not understand some of the matters in the show cause letter, she could “respond to the specific allegations which were outlined.” 231

[233] The Respondent submitted that Mrs Thomson alleges that she was unable to respond to the allegations as she was medically unfit, however Mrs Thomson did not submit a copy of her medical certificate, could not recall the date of the medical certificate, 232 and could provide no evidence that the medical certificate had been provided to the Respondent.

[234] The Respondent submitted that during the response period Mrs Thomson was able to engage in other activities, including engaging and instructing solicitors on a variety of matters, and attending the College athletics carnival. The Respondent submitted that it should not be accepted that Mrs Thomson was unfit to respond to the allegations of misconduct.

[235] The Respondent accepted that Mrs Thomson did apply for an extension of time, however this request was denied by the Respondent, and the Respondent submitted that this refusal was reasonable in the circumstances in the context of the significant damage which had occurred due to the social media campaign by “both sides”, the climate in the community, and harm to the school. 233

[236] The Respondent submitted that Mrs Thomson’s request for an extension of time stated that “a complete and final version of the second report is required to respond properly.” 234 The Respondent submitted that firstly, the extract of the Second interim report was sufficient to respond properly, and in any event the full version was provided to Mr and Mrs Thomson’s solicitor on 1 June 2018 according to Mr Wilton’s evidence.235

[237] Further, the Respondent submitted that if an extension of time had been provided, it would not have changed the outcome, given that in the proceedings before the Commission, some nine months after the dismissal, no evidence or Exculpatory Material has been produced which constitutes a satisfactory or acceptable response to the allegations, or disabuses the content of the Second interim report.

[238] The Respondent submitted that Mrs Ferguson alleges that she was unable to respond to the allegations as she was medically unfit. A copy of email correspondence from MEGC on 4 June 2018 to Ms Ferguson requesting satisfactory evidence of her incapacity to respond to the allegations was attached to the evidence of Mr Wilton, along with a copy of the medical certificate provided by Ms Ferguson. 236 The medical certificate was dated 4 June 2018 and says Mrs Ferguson will be unfit for duty until 4 July 2018, however includes that Mrs Ferguson states that her incapacity commenced on 4 May 2018. The Respondent submitted the medical certificate provided was not in a form reasonably required by the Respondent.

[239] The Respondent submitted that during her period of incapacity Mrs Ferguson was able to:

(a) Contribute to what she says was a ‘family email’ responding to matters raised by the financial review on 7 and 11 May 2018. The Respondent submitted that Mrs Thomson gave evidence that this email was Mrs Ferguson’s draft; 237

(b) Meet Mr Cook on 17 May 2018;

(c) Attend a meeting of Members of the Kimberley College Ltd and sign a ‘spill notice’ on 30 May 2018;

(d) Write a lengthy email to Mr Wilton on 2 June 2018 responding to matters raised in the Second interim report;

(e) Continue to operate the football academy and arrange the Spain/Sweden trip;

(f) Engage and instruct solicitors on a variety of matters; and

(g) Attend the College athletics carnival on 5 June 2018.

[240] The Respondent submitted that it should not be accepted that Mrs Ferguson was unfit to respond to the allegations of misconduct. The Respondent submitted that Mrs Ferguson made no application for an extension of time to respond to the allegations, and instead relied on a medical certificate which the Respondent says was not in a form reasonably required by it.

[241] Further the Respondent submitted that if an extension of time had been provided, it would not have changed the outcome, given that in the proceedings before the Commission, some nine months after the dismissal, no evidence or Exculpatory Material has been produced which constitutes a satisfactory or acceptable response to the allegations, or disabuses the content of the Second interim report.

[242] The Respondent referred to Mr Ferguson’s claim made during his evidence that he did not understand the show cause notice, 238 yet the Respondent says Mr Ferguson provided a fulsome response to the allegations by way of his witness statement and annexures pleaded in the proceedings. Further the Respondent refers to Mr Ferguson’s claim he was medically unfit to respond, and the Respondent submitted that Mr Ferguson provided no evidence of any incapacity which would have prevented him from responding to allegations. The Respondent submitted that instead Mr Ferguson made vague references to an undated letter provided by his medical practitioner239 and could not explain why a letter dated 1 November 2018 from the same doctor provided as part of Mrs Ferguson’s evidence240 made no reference to having consulted with him.

[243] The Respondent submitted that Mr Ferguson provided no evidence to confirm a medical certificate was ever provided to the Respondent. The Respondent submitted that during the response period Mr Ferguson was able to engage in the following activities:

(a) Engage and instruct solicitors on a variety of matters; and

(b) Attend the College athletics carnival on 5 June.

[244] The Respondents submitted that it should not be accepted that Mr Ferguson was unfit to respond to the allegations of misconduct and that he made no application for an extension of time to respond to the allegations.

[245] The Respondent denied that the Applicants were prevented from attending the College to gather Exculpatory Material required to respond to the allegations. It says that the only one request was made for material in order to respond to the allegations, by Mr and Mrs Thomson, who requested a full copy of the Second Interim Report. The Respondents says the extract of the Second Report was sufficient to respond, however in any event a full version was provided to Mr and Mrs Thomson’s solicitor Donovan Knapp on 1 June 2018 according to Mr Wilton. 241

[246] The Respondent says that no requests for access to any material were received by Mr or Mrs Ferguson despite invitation to make such requests in the show cause letter. The Respondent says both GT Advisory and McGrathNicol attended the College premises independently of each other and were unable to locate any Exculpatory Material.

[247] The Respondent submitted that despite the Applicants filing significant material in the course of proceedings, they failed to file any Exculpatory Material, even their own personal bank statements which at the very least could have demonstrated how College funds transferred to their personal bank accounts had been legitimately expended (or monies owed to the College for loans, holidays or other expenditure had been repaid as alleged), and the Commission should draw a Jones v Dunkel inference for their failure to call witnesses or tender evidence to support these assertions.

[248] Mr Wilton rejected the proposition put to him that on or before 31 May 2018 he had already made his mind up and instructed MEGC to send termination letters. 242 Mr Wilton was referred to the termination letters dated 12 June, and a date at the bottom of the page as a footnote of 31 May 2018. During re-examination it became apparent the show cause letters of 1 June contained the same date of 31 May 2018 as a footnote.243 It would appear from this evidence that the date of 31 May 2018 contained as a footnote on the termination letters of 12 June does not support an inference that the Applicants have sought to draw that the letters had been prepared in advance and is more likely a simple IT glitch.

[249] It was put to Mr Wilton that he treated the Applicants like one unit, and that it was decided he had to get rid of them all. Mr Wilton said he accepted that it probably was necessary to get rid of all them because they all represented what had gone on. 244 During re-examination he reiterated that each case was treated on its own merits, and referred to one who was not terminated at the time as they were on a period of leave.

[250] I have considered all of the evidence and am satisfied the Applicants were given an opportunity to respond to the reasons related to their conduct. The extensive summary from the GT second interim report contained the relevant information they needed to respond to and it was provided with the show cause letters. The evidence does not support the claims of the Applicants that they were suffering from medical conditions that prevented them from responding. I am satisfied only Mrs Thomson asked for an extension and that the Respondent was entitled to refuse the request in the circumstances. I otherwise accept the submissions of the Respondent that the Applicants were given an opportunity to respond, and reject the Applicants claim that they were denied procedural fairness.

Was there an unreasonable refusal to a support person?

[251] The Applicants made no specific submission on this issue. Kimberley College submitted that this factor is not relevant, as no meetings were held in relation to the Applicants’ dismissals. 245 I intend to treat the consideration as neutral.

If the dismissal related to unsatisfactory performance – whether the person had been warned about the unsatisfactory performance?

[252] This factor is not relevant as the dismissals were not based on performance.

Did the size of the business likely impact on the procedures followed in effecting dismissal? Did the employer have a dedicated Human Resources team?

[253] Kimberley College submitted that the size of the employer’s business is a neutral factor, as the College is a medium sized business. Kimberley College submitted that the Commission should have regard to the fact that the College is a not for profit enterprise, with the Board performing their duties on a voluntary basis. 246 Kimberley College submitted that the human resources factor “is not relevant”.247 I intend to treat this factor as neutral.

Any other matters the FWC considers relevant

[254] The Applicants submitted that the decision to terminate their employment on a summary basis was harsh, due to the impact the termination had on their personal and economic situations. 248

[255] The Applicants submitted that the Commission should have regard to the fact that there have been damaging responses from the community, and social media backlash as a consequence of their dismissals by Kimberley College. 249 The Applicants submitted that they have received threats of violence, and their names have been “tarnished beyond repair” as a result of Kimberley College releasing the allegations against them in a report, and their subsequent dismissals.250

[256] The Applicants submitted that due to their “vast experience and array of duties”, they each require a “substantially high salary”, which further impacts their ability to gain appropriate employment in the future. Additionally, the Applicants submitted that their spouses were dismissed by Kimberley College, meaning they are unable to rely on their incomes until such a time as they are able to acquire employment.  251

[257] Mrs Thomson submitted that the Commission should also have regard to her age, as a factor impacting her ability to acquire alternative employment.

[258] It has also been contended for the Applicants that the decision made by the Board and the instructions given to the College solicitors was ultravires as it did not have the necessary authority. As the Respondents have submitted, Mr Wilton gave evidence 252 that due to a number of meetings taking place at the time, the directors had resolved to authorise Mr Wilton and Mr Steen to provide instructions to the solicitors on behalf of the Board. I accept the Respondent’s submission that the decision to dismiss was taken by the Board and that while the Board may not have been following proper procedure, it was open to the Board to make the decision.

[259] I also accept that it is appropriate to draw a Jones v Dunkel inference against the Applicants for failing to call Mr Thomson when it seems clear that he would have been in a position to give evidence squarely relevant to the claims made against the Applicants concerning critical facts in issue. I am inclined to a similar view about Ms Postle; while there was some evidence that Ms Postle did not wish to co-operate with the Applicants, it would have been open to them to seek an order for her to give evidence.

[260] Further to this, facts acquired after termination such as the 20 August 2018 report prepared by McGrathNicol 253 confirmed by the independent auditors engaged by the QNSSAB to review a variety of matters at the College further tell against the Applicants.

[261] Added to that is the QNSSAB decision to withdraw the Respondent’s eligibility for Government funding for a period 1 July 2012 to 1 May 2018, for reasons directly related to the conduct of the Applicants’. 254

Conclusion on s.387 matters

[262] Despite the College being a substantial business enterprise, it is apparent from the evidence that the College was functioning almost as if it was privately owned by the Thomson family rather than being an independent non-state school with 900 students, registered as a company with a Board of Directors and a vast array of legal obligations and accountabilities.

[263] Company directors have a duty to ensure a business is properly and honestly managed. It is apparent that for a considerable time good corporate governance simply did not exist at Kimberley College. The balance of power between management (being mainly Mr Thomson as the principal of the school, and his daughter Ms Ferguson) on the one hand, and the directors on the other, was so completely out of kilter that virtually all management decisions were being made without any proper oversight by the Board resulting in governance practices that allowed members of the wider Thomson family to take full advantage of those circumstances by obtaining a range of extravagant personal benefits that they should never have enjoyed.

[264] It is not an exaggeration to say that each of the Applicants have been participants in misconduct that, once uncovered and brought to the attention of regulatory authorities, has raised serious consideration as to whether the school should be allowed to continue to operate at all. I find for all of the reasons set out above that the dismissal of each of the Applicants was not unfair and on that basis dismiss all three applications.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR709422>

 1   Respondent’s Outline of Submissions dated 2 October 2018 at [6].

 2   Respondent’s Outline of Submissions dated 2 October 2018 at [6].

 3   Respondent’s Outline of Submissions dated 2 October 2018 at [7].

 4   Respondent’s Outline of Submissions dated 2 October 2018 at [8]-[10].

 5   Respondent’s Outline of Submissions dated 2 October 2018 at [16].

 6   Respondent’s Outline of Submissions dated 2 October 2018 at [16].

 7   Respondent’s Outline of Submissions dated 2 October 2018 at [17].

 8   Amy Ferguson Outline of Submissions filed 30 August 2018 at [18]; Kevin Ferguson Outline of Submissions filed 30 August 2018 at [14]; Jennifer Thomson Outline of Submissions filed 30 August 2018 at [16].

 9   Witness Statement of Amy Ferguson dated 30 August 2018 attachment “AF24 – Termination letter”; Witness Statement of Kevin Ferguson dated 30 August 2018 attachment “KF7 – Termination letter”; Jennifer Thomson’s F2 Unfair Dismissal application filed 2 July 2018, attachment 1 – Termination letter.

 10   Transcript PN 34-51

 11   Witness Statement of Jennifer Thomson dated 29 August 2018 at [1]-[3].

 12   Transcript PN 148-150

 13   Witness Statement of Amy Ferguson dated 30 August 2018 at [1]-[2].

 14   Witness Statement of Amy Ferguson dated 30 August 2018 at [9]-[10].

 15   Witness Statement of Amy Ferguson dated 30 August 2018 at [6].

 16   Witness Statement of Amy Ferguson dated 30 August 2018 annexure AF 15

 17   Witness Statement of Amy Ferguson dated 30 August 2018 at [3]-[5].

 18   Witness Statement of Amy Ferguson dated 30 August 2018 at [8].

 19   Witness Statement of Kevin Ferguson dated 30 August 2018 at [1]-[2].

 20   Transcript PN 1335

 21   Witness Statement of Kevin Ferguson dated 30 August 2018 at [3].

 22   Witness Statement of Kevin Ferguson dated 30 August 2018 at [4].

 23   Transcript PN 1332

 24   Witness Statement of Paul Wilton dated 28 September 2018 at [2]

 25   Witness Statement of Paul Wilton dated 28 September 2018 at [4]

 26   Witness Statement of Paul Wilton dated 28 September 2018 at [8]

 27   Witness Statement of Paul Wilton dated 28 September 2018 at [13]

 28   Transcript PN 436-437

 29   Transcript PN 463-468

 30   Witness Statement of Amy Ferguson dated 30 August 2018 at [59].

 31   Transcript PN 478

 32   Witness Statement of Amy Ferguson dated 30 August 2018 annexure AF 15

 33   Transcript PN 540

 34   Transcript PN 542

 35   Transcript PN 552 – 557

 36   Witness Statement of Paul Wilton dated 28 September 2018 annexure PW 3

 37   Witness Statement of James Cook dated 27 September 2018 at [2] to [3]

 38   Witness Statement of James Cook dated 27 September 2018 at [113]

 39   Witness Statement of James Cook dated 27 September 2018 at [117]

 40   Witness Statement of Paul Wilton dated 28 September 2018 at [40]

 41   Witness Statement of Paul Wilton dated 28 September 2018 at [17]

 42   Witness Statement of Paul Wilton dated 28 September 2018 at [18]-[20]

 43   Witness Statement of Paul Wilton dated 28 September 2018 at [25]

 44   Witness Statement of Paul Wilton dated 28 September 2018 at [27]

 45   Witness Statement of Paul Wilton dated 28 September 2018 at [36]

 46   Witness Statement of Amy Ferguson dated 30 August 2018 at [32].

 47   Witness Statement of Paul Wilton dated 28 September 2018 at [38]

 48   Witness Statement of Paul Wilton dated 28 September 2018 at [30]

 49   Witness Statement of Paul Wilton dated 28 September 2018 at [45]

 50   Witness Statement of Amy Ferguson dated 30 August 2018 at [33].

 51   Witness Statement of Amy Ferguson dated 30 August 2018 annexure AF 11

 52   Witness Statement of Amy Ferguson dated 30 August 2018 annexure AF 2

 53   Witness Statement of James Cook dated 27 September 2018 at [15] to [16]

 54   Transcript PN 1012-1015

 55   Witness Statement of Amy Ferguson dated 30 August 2018 at [38] and [39].

 56   Witness Statement of Amy Ferguson dated 30 August 2018 annexure AF 14

 57   Witness Statement of Paul Wilton dated 28 September 2018 at [52]

 58   Witness Statement of James Cook dated 27 September 2018 at [8]

 59   Witness Statement of James Cook dated 27 September 2018 at [10]

 60   Witness Statement of Amy Ferguson dated 30 August 2018 at [42].

 61   Witness Statement of James Cook dated 27 September 2018 at [33]

 62   Transcript PN 254-256

 63   Transcript PN 278-279

 64   Witness Statement of James Cook dated 27 September 2018 at [22]

 65   Witness Statement of James Cook dated 27 September 2018 at [26]

 66   Witness Statement of James Cook dated 27 September 2018 annexure JC 5

 67   Transcript PN 1701

 68   Respondent’s Outline of Submissions dated 2 October 2018 at [41]-[42].

 69   Witness Statement of Paul Wilton dated 28 September 2018 at [64]

 70   Witness Statement of James Cook dated 27 September 2018 annexure JC 6

 71   Witness Statement of Paul Wilton dated 28 September 2018 at [55] to [58] annexures PW 12, 13, 14 15.

 72   Transcript PN 2083

 73   Witness Statement of Paul Wilton dated 28 September 2018 at [67]

 74   Witness Statement of James Cook dated 27 September 2018 at [37]

 75   Witness Statement of James Cook dated 27 September 2018 at [40]

 76   Witness Statement of Paul Wilton dated 28 September 2018 at [75]

 77   Transcript PN 2090

 78   Witness Statement of James Cook dated 27 September 2018 annexure JC 8

 79   Transcript PN 1815

 80   Witness Statement of Paul Wilton dated 28 September 2018 at [75] annexure PW 27

 81   Witness Statement of Paul Wilton dated 28 September 2018 at [82]

 82   Transcript PN 2151-2155

 83   Transcript PN 2364

 84   Transcript PN 2298 – 2307

 85   Witness Statement of Paul Wilton dated 28 September 2018 at [85]

 86   Transcript PN 1186-1208

 87   Transcript PN 119

 88   Witness Statement of Jennifer Thomson dated 29 August 2018 at [4]-[7].

 89   Witness Statement of Paul Wilton dated 28 September 2018 at [60]

 90   Transcript PN 1176- 1180

 91   Transcript PN 284-289

 92   Witness Statement of Amy Ferguson dated 30 August 2018 at [70].

 93   Witness Statement of Kevin Ferguson dated 30 August 2018 at [15].

 94   Witness Statement of Paul Wilton dated 28 September 2018 at [93] to [95]

 95   Witness Statement of Paul Wilton dated 28 September 2018 at [101] to [105]

 96   Witness Statement of Paul Wilton dated 28 September 2018 at [106] to [115]

 97   Transcript PN 2200 - 2202

 98   Transcript PN 2356

 99   Witness Statement of Paul Wilton dated 28 September 2018 at [116] to [117]

 100   Witness Statement of Jennifer Thomson dated 29 August 2018 at [9].

 101   Witness Statement of Jennifer Thomson dated 29 August 2018 at [12].

 102   Transcript PN 208-218

 103   Transcript PN 350

 104   Transcript PN 208

 105   Transcript PN 113

 106   Witness Statement of James Cook dated 27 September 2018 at [94]

 107   Transcript PN 1863

 108   Respondents closing submissions para 23, Transcript PN 208 – PN 219

 109   Respondents closing submissions para 24, Statement of Cook Exhibit 5 para 39

 110   Respondents closing submissions para 25, Transcript PN 1917

 111   Witness Statement of Jennifer Thomson dated 29 August 2018 at [12].

 112   Transcript PN 155-156

 113   Transcript PN162-166

 114   Transcript PN 173

 115   Witness Statement of Amy Ferguson dated 30 August 2018 at [68].

 116   Transcript PN 854-870

 117   Witness Statement of Kevin Ferguson dated 30 August 2018 at [12].

 118   Transcript PN 1361

 119   Respondents closing submissions para 21, Transcript PN 175

 120   Transcript PN 1352-PN 1361

 121   Transcript PN 1359

 122   Transcript PN 890-902

 123   Witness Statement of Kevin Ferguson dated 30 August 2018 at [12].

 124   Transcript PN 1373

 125   Transcript PN 1382

 126   Respondents closing submissions para 42, Transcript PN 1370 – PN 1382

 127   Transcript PN 193

 128   Transcript PN 195

 129   Transcript PN 904-916

 130   Transcript PN 1385-1390

 131   Respondents closing submissions para 22, Transcript PN 192 – PN 199

 132   Respondents closing submissions para 43, Transcript PN 1383 – PN 1390

 133   Transcript PN 182

 134   Transcript PN 186-187

 135   Transcript PN 1016-1039

 136   Respondents closing submissions para 21, Transcript PN 190

 137   Transcript PN 202

 138   Transcript PN 205

 139   Transcript PN 939-936

 140   Transcript PN 1398

 141   Transcript PN 1410

 142   Transcript PN 1423-1426

 143   Witness Statement of James Cook dated 27 September 2018 at [105]

 144   Witness Statement of James Cook dated 27 September 2018 at [106]

 145   Respondents closing submissions para 31, Transcript PN 930

 146   Respondents closing submissions para 32, Transcript PN 979 – PN 1011

 147   Transcript PN 1401- 1427

 148   Respondents closing submissions para 22, Transcript PN 202-207

 149   Witness Statement of Amy Ferguson dated 30 August 2018 at [65].

 150   Witness Statement of Amy Ferguson dated 30 August 2018 at [69].

 151   Transcript PN 1040-1042

 152   Transcript PN 1055

 153   Transcript PN 1060-1068

 154   Transcript PN 1073-1079

 155   Transcript PN 1080-1083

 156   Transcript PN 1092-1095

 157   Transcript PN 1131

 158   Transcript PN 1149

 159   Transcript PN 1152-1153

 160   Transcript PN 1155-1159

 161   Transcript PN 1160

 162   Transcript PN 687 - 689

 163   Transcript PN 701-702

 164   Transcript PN 756

 165   Witness Statement of James Cook dated 27 September 2018 annexure JC 5

 166   Transcript PN 1337

 167   Transcript PN 1347-1349

 168   Witness Statement of Kevin Ferguson dated 30 August 2018 at [12].

 169   Transcript PN 1434

 170   Transcript PN 1448

 171   Transcript PN 1450

 172   Transcript PN 1465

 173   Witness Statement of Kevin Ferguson dated 30 August 2018 at [12].

 174   Transcript PN 1466-1476

 175   Transcript PN 1480-1484

 176   Transcript PN 1527

 177   Transcript PN 1529-1531

 178   Witness Statement of James Cook dated 27 September 2018 at [104]

 179   Witness Statement of James Cook dated 27 September 2018 at [82] to [84]

 180   Witness Statement of Jennifer Thomson dated 29 August 2018 at [12].

 181   Transcript PN 230

 182   Transcript PN 237

 183   Respondents closing submissions para 27, Transcript PN 755

 184   Respondents closing submissions para 34, Transcript PN 1040

 185   Respondents closing submissions para 35, Transcript PN 1041-1062

 186   Respondents closing submissions para 35, Transcript PN 1104

 187   Respondents closing submissions para 36, exhibit 5 para 83 annexure JC -23

 188   Respondents closing submissions para 37, Transcript PN 1160

 189   Transcript PN 1092 – PN 1162

 190   Transcript PN 1466 – PN 1531

 191   Transcript PN 1337 – PN 1347

 192   Respondents closing submissions para 44, Transcript PN 1434 – PN 1465

 193   Transcript PN 221-227

 194   Transcript PN 583-586

 195   Witness Statement of Paul Wilton dated 28 September 2018 at [120] at annexure PW 38

 196   Witness Statement of Paul Wilton dated 28 September 2018 at [133] to [165]

 197   Witness Statement of James Cook dated 27 September 2018 at [85]

 198   Witness Statement of James Cook dated 27 September 2018 at [91]

 199   Witness Statement of James Cook dated 27 September 2018 at [17] to [18]

 200   Witness Statement of James Cook dated 27 September 2018 at [124]

 201   Witness Statement of James Cook dated 27 September 2018 at [125] to [127]

 202   Transcript PN 1832

 203   Transcript PN 1847

 204   Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.

 205   Ibid.

 206   Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681, 685.

207 Edwards v Justice Giudice [1999] FCA 1836, [7].

 208   King v Freshmore (Vic) Pty Ltd [2000] AIRC 1019, [23]-[24].

 209   Amy Ferguson Outline of Submissions filed 30 August 2018 at [18]; Kevin Ferguson Outline of Submissions filed 30 August 2018 at [14]; Jennifer Thomson Outline of Submissions filed 30 August 2018 at [16].

 210   Transcript PN 1754 – 1768

 211   Applicants closing submissions para 13

 212   Transcript PN 799, PN 283

 213   Transcript PN 290 -291

 214   Transcript PN 1757-1758

 215   Applicants closing submissions para dated 30 February 2018 at [12]

 216   Lane v Arrowcrest (1990) 27 FCR 427

 217   Transcript PN 120-121, 138-144

 218   Respondent’s Outline of Submissions dated 2 October 2018 at [62].

 219   Respondent’s Outline of Submissions dated 2 October 2018 at [63].

220 Wadey v YMCA Canberra [1996] IRCA 568.

221 Gibson v Bosmac Pty Ltd (1995) 60 IR 1, 7.

222 Pitts v AGC Industries [2013] FWCFB 9196, [54] referring also to Gibson v Bosmac Pty Ltd (1995) 60 IR 1; cited and adopted in RMIT v Asher (2010) 194 IR 1..

 223   Transcript PN 138-140

 224   Witness Statement of Amy Ferguson dated 30 August 2018 at [72] – [76]

 225   Witness Statement of Kevin Ferguson dated 30 August 2018 at [16].

 226   Transcript PN 1622 – 1623

 227   Kevin Ferguson Outline of Submissions filed 30 August 2018 at [8]-[10].

 228   Amy Ferguson Outline of Submissions filed 30 August 2018 at [8]-[14].

 229   Jennifer Thomson Outline of Submissions filed 30 August 2018 at [8]-[12].

 230   Applicants closing submissions para 35

 231   Transcript PN 138

 232   Transcript PN 285

 233   Exhibit 6 Statement of Wilton para 109 – 115, Transcript PN 258; PN 300 – PN 301; PN 1258 – PN 1263

 234   Exhibit 6 Statement of Wilton annexure PW – 36

 235   Exhibit 6 Statement of Wilton at para 79

 236   Exhibit 6 Statement of Wilton annexure PW 16

 237   Transcript PN 257-PN 258

 238   Transcript PN 1672

 239   Exhibit 4 statement of Mr Ferguson annexure KF 3

 240   Exhibit 2 statement of Mrs Ferguson annexure AF 52

 241   Respondents closing submissions para 15, statement of Wilton para 79

 242   Transcript PN 2258

 243   Transcript PN 2376

 244   Transcript PN 2313

 245   Respondent’s Outline of Submissions dated 2 October 2018 at [98].

 246   Respondent’s Outline of Submissions dated 2 October 2018 at [100].

 247   Respondent’s Outline of Submissions dated 2 October 2018 at [101].

 248   Amy Ferguson Outline of Submissions filed 30 August 2018 at [4]; Kevin Ferguson Outline of Submissions filed 30 August 2018 at [4]; Jennifer Thomson Outline of Submissions filed 30 August 2018 at [4].

 249   Amy Ferguson Outline of Submissions filed 30 August 2018 at [29]; Kevin Ferguson Outline of Submissions filed 30 August 2018 at [25]; Jennifer Thomson Outline of Submissions filed 30 August 2018 at [27].

 250   Amy Ferguson Outline of Submissions filed 30 August 2018 at [29]-[30]; Kevin Ferguson Outline of Submissions filed 30 August 2018 at [25]-[26]; Jennifer Thomson Outline of Submissions filed 30 August 2018 at [27]-[28].

 251   Amy Ferguson Outline of Submissions filed 30 August 2018 at [31]-[32]; Kevin Ferguson Outline of Submissions filed 30 August 2018 at [27]-[28]; Jennifer Thomson Outline of Submissions filed 30 August 2018 at [29]-[30].

 252   Transcript PN 2359-PN 2361

 253   Respondents closing submissions para 7, report annexure to the Wilton Statement as PW 42

 254   Respondents closing submissions para 9, annexure to the Wilton Statement at PW 44