Pamapuria School is $10,000 out of pocket after successfully defending a claim for unjustified dismissal by former principal Stephen Hovell.
At the same time, the Employment Relations Authority (ERA) has ordered Mr Hovell to pay $15,000 in costs for an employment case that ruled he was rightfully dismissed for failing to take action against paedophile teacher James Parker, despite police raising concerns about the teacher's sleepovers with young boys.
Defending the case had cost $27,693.89 and Pamapuria commissioner Larry Forbes said the costs from Mr Hovell would go to the insurance company that paid for the defence, but the school still had to stump up an insurance excess of $10,000.
"The school doesn't benefit [from the award of costs].
"But we can take something from the fact that we don't have to pay the full costs of this case, which was totally unavoidable," Mr Forbes said.
"The school has to bear the costs of that insurance excess. It's another kick in the guts for the school."
Mr Hovell was sacked in February after an investigation found he did not take appropriate action when concerns were first raised about Parker, his deputy principal.
Parker is serving a sentence of preventive detention with a minimum seven years' jail after pleading guilty to 74 charges representing more than 300 sexual offences against boys.
Mr Hovell took a case for unjustified dismissal to the ERA, which upheld the sacking in August after he withheld from the school board part of a letter from police warning of Parker's inappropriate behaviour in having boys sleep at his house.
The ERA investigation found Mr Hovell sought to protect his deputy principal, rather than his students, at the time of the initial police complaint in 2009.
In the letter, Detective Dean Gorrie said: "In my view it is clearly inappropriate for a school teacher to invite young children to their residence, outside of school hours, and have them sleeping over, and I would suggest that this practice must stop immediately, and protocols be initiated to discourage them from occurring in the future."
Mr Hovell said he asked Parker to stop having sleepovers, but kept no record of the conversation and failed to formally censure him.
In a decision released yesterday, the ERA has ordered Mr Hovell to pay the school $15,000 in costs it incurred defending Mr Hovell's claim to the ERA.
Before the ERA case, Mr Forbes had made a Calderbank (informal) offer to Mr Hovell of $15,000. Mr Hovell had rejected the offer, saying at the time he was unaware of evidence from the school's support staff to the effect that they had advised Mr Hovell Parker was still taking children to his home, in contravention of Mr Hovell's instruction that the practice cease.
Mr Hovell contended that had he known of that evidence at the time of the offer, he might have accepted it.
He was now living off superannuation for a single person of $350 per week (his sole income) and has few assets, as his home was the property of a family trust.
ERA member James Crichton said an informal settlement offer was made.
It was self-evident Mr Hovell would have been materially better off to have accepted that than to have proceeded with the ERA investigation.