Malek Fahd Islamic School Limited and Minister for Education and Training

This matter concerned an appeal by Malek Fahd Islamic School Limited (MFISL) against a decision by the Minister for Education and Training to revoke its approval as an authority eligible to receive Commonwealth financial assistance. MFISL, a large educational institution, had received substantial funding from the Commonwealth between 2012 and 2016. The dispute arose from concerns that MFISL was not operating in accordance with the requirements for Commonwealth funding, specifically regarding its not-for-profit status, its fitness and propriety, and its compliance with legislative obligations.

The court was required to determine whether MFISL satisfied the conditions for receiving Commonwealth funding under the relevant Act. This involved assessing whether the school was conducted for profit, whether it was a fit and proper person to be an approved authority, and whether it had complied with its obligations under section 78 of the Act. The court also considered the impact of historical uncommercial transactions and ongoing financial entanglements with the Australian Federation of Islamic Councils Inc (AFIC) on MFISL's compliance.

The court found that MFISL had not been compliant with section 75 of the Act in the past because it was being conducted for profit. It also concluded that MFISL was not a fit and proper person prior to March 2016 and had not complied with its obligations under section 78. While acknowledging that significant changes had been made since March 2016, including new management, policies, and the commencement of legal proceedings against AFIC, the court determined that MFISL continued to be operated for profit. This was due to the ongoing burden of uncommercial arrangements with AFIC, including the need to make provisions for these obligations in its accounts, and the unresolved uncommercial aspects of the Greenacre lease, which meant that funds were still being applied otherwise than for the purposes of the school. Consequently, the discretion to revoke the approval under section 81 of the Act was enlivened.