Link: http://www.raywilliams.com.au/index.php?article=video/97

Private Members Statement to the NSW Legislative Assembly:

Mr RAY WILLIAMS (Hawkesbury) [1.17 p.m.]: St Gregory's Armenian School at Rouse Hill has operated for the past 26 years, achieving outstanding results on behalf of its students. The school is credited with being in the top 50 schools as per National Assessment Program—Literacy and Numeracy results. The school was originally started by Daniel and Michael Ghoughasian, the directors of the school, on behalf of children of Armenian descent living in lower socioeconomic areas of Sydney. These children were seen to be at risk of not being appropriately educated and living a life of poverty or crime as a result. At this point in time the two directors have injected over $15 million dollars of their own money to keep the school operating. The directors charge only $500 per year per student, which does not even meet the costs of running such a school.

In 2006 the Commonwealth Bank of Australia granted a bridging loan of $670,000 to St Gregory's school for the commencement of new buildings. This was similar to the original funding arrangement to build the school. Following the development application being approved by council in 2007 and to progress to the next stage the school requested an additional $200,000 from the Commonwealth Bank of Australia, which was agreed to on the basis of a report from a preferred quantity surveyor. In early 2008 Mr Vince Portelli, a quantity surveyor recommended by the bank, visited St Gregory's school to look at the site for the new buildings, viewed the architect's drawings and provided a report stating to the bank that everything was in order.

In May 2008 the Commonwealth Bank advised the school that it would have the additional $200,000 in two weeks. These comments were made by Mr Luke McGrath, the loans manager of the bank, on an agreed and legal tape-recorded meeting with the school's two directors and one independent person as witness for the school. I have listened to the recording and can confirm its accuracy. By mid-2008 when the additional $200,000 was not forthcoming the two directors of the school were asked to go to the bank's offices in Parramatta. The meeting was held with Mr Luke McGrath and senior Commonwealth Bank of Australia manager Mr Dallas Whitehead, plus the directors of the school and the same independent witness. During the meeting the two bank officials requested the school reduce the current bridging loan by $70,000 to $600,000 because the bank had incorrectly forwarded the last $70,000 as an overdraft. The directors and independent witness were advised that, if the school did this, the additional $200,000 would be available to the school within 48 hours.

The school deposited $95,000 into the account—an increase of $25,000 on the amount requested—within 24 hours, but the promised money was never forthcoming and within three days the school was advised by Luke McGrath that the bank would not proceed with any further funding to the school. The school, which also had $160,000 of its own money in its own account, then had that account immediately frozen by the Commonwealth Bank. It is still frozen to this day.

The CBA took the school to court in 2010 to recover all its money. However, the school won the case, with the judge stating that, as the CBA had forwarded the original $670,000 to the school, this demonstrated a commitment by the CBA to fund the future buildings of the school. The CBA, however, still kept the school's account with $160,000 in it frozen, and the school could not pay any bills. The school, now quite desperate, was seeking pro bono legal support to defend a cross-claim against the CBA to reclaim its costs and have its frozen account reopened. However, as it could not engage a pro bono lawyer until late July 2010 the school wrote a letter to Gadens Lawyers, representing the CBA, and Maurice Blackburn Lawyers, representing some teachers, asking for a delay in the hearing in the Supreme Court for liquidation against the school to enable the school to get legal representation. The school further advised these two lawyers that the school would cross-claim against the CBA for outstanding legal costs and the reinstating of its frozen bank account, and fully expected that case to be successful, based on the first case. This would ultimately mean there would be no case for forcing the school into liquidation.

The case, however, went ahead and the school had no representation present. Maurice Blackburn Lawyers said on the record in court that they would not wait for the school and pushed ahead with liquidation. Justice White, who was hearing this case, made the decision to push the school into liquidation based on the fact that the teachers of the school had not been paid their redundancies. However, Justice White should have asked why the teachers had not been paid in the first place, as it was not because the school would not pay them; it was because the CBA had frozen the school's bank account with $160,000 in it and the school could not access its funds. The teachers were owed only $100,000, and the school therefore had adequate funds in its account to pay the teachers. The school was forced into liquidation in what can only be termed a huge injustice, and the CBA should be condemned for its actions of freezing the school's account.

In April 2010 the Board of Studies of the Department of Education and Training issued a further five-year licence to the school which was based on its past record, its financial situation and its achievements. However, a month ago the Minister for Education and Training deregistered the school. A school, even without a single student, does not become deregistered unless it has no students for at least one year. This school had students in attendance only two months ago. The CBA should be condemned for its actions, having fully understood the loan arrangements and the commitment of funding to this school. Though its actions the CBA has wrongfully forced this school into liquidation and sold its entire assets, which is nothing short of disgraceful. The CBA should not be able to get its hands on this land, which is owned by two good people whose only intention was to provide a place of education for children.