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Former Milingimbi principal at the centre of a damning report claims corruption watchdog had 'ulterior motives'

Ms Sherrington was the principal of Milingimbi school between 2015 and 2019. (Supplied)

A remote Northern Territory school principal who was found by ICAC to have used hundreds of thousands of dollars in school funding for herself, has become the latest in a string of people to take the former anti-corruption commissioner to court.

Jennifer Sherrington was the principal at Milingimbi school from 2015 to 2019, when former Independent Commissioner Against Corruption, Ken Fleming, found she diverted money intended "for the poorest cohort of children in the country" for personal use.

The July 2021 ICAC report said Ms Sherrington used school money for unnecessary charter flights, hire cars, for personal shopping, fine dining, and fast food.

The ICAC also found she allocated a government house to her nephew and attempted to manipulate enrolment and attendance figures to claim additional funding for the school.

The report found Ms Sherrington "was not in the business of education … she was in the business of manipulating data and herding children to be at school on 'census' days to maximise funding from both the NT and Australian governments."

Ms Sherrington denies the allegations of corrupt conduct.

The hearing before Justice John Burns continues. (ABC News: James Dunlevie)

'No real attempt to determine the truth'

In the Northern Territory Supreme Court on Thursday, Ms Sherrington's lawyer, Trevor Moses, claimed the anti-corruption commissioner "acted in bad faith", had personal "ulterior motivations" and the report about her alleged corrupt conduct was "salacious" and "sensationalist."

Mr Moses told the court the ICAC's report was "rushed" because Mr Fleming had allegedly been under pressure from the media to release the findings of a handful of investigations before he retired.

"He's got time pressures and a public relations nightmare … Mr Fleming needed to turn around this investigation report and public statement before left office and he needed it to be in the public interest," Mr Moses said.

Mr Fleming left his role as anti-corruption commissioner in July 2021.

Ms Sherrington's barrister argued the investigation was a "tapestry of errors" and people who could have corroborated Ms Sherrington's version of events were not contacted.

"There was no real attempt to determine the truth of serious allegations including fraud and corruption, which were published to the world," Mr Moses said.

Mr Fleming left his role as anti-corruption commissioner in July 2021. (ABC News: Alan Dowler)

Allegations 'illogical', ICAC lawyers claim

Mr Moses told the court investigators who interviewed Ms Sherrington had "already identified [her] as the villain."

Mr Moses argues Ms Sherrington was not offered procedural fairness or natural justice.

Lawyers for Mr Fleming rejected Ms Sherrington's claim he acted in "bad faith", telling the court the allegations made "no sense", as the Commissioner himself had delegated the investigation to a colleague, Rex Wild QC.

Barrister Stephen Free SC denied the allegation Mr Fleming was "in a rush" to publish the report about Ms Sherrington before his retirement, telling the court the former Commissioner was not involved in nor responsible for "all of the steps in this investigation."

"It's really quite illogical to then suggest, despite having delegated these things to Mr Wild to do, Mr Fleming assumed responsibility," Mr Free said.

Mr Free also told the court Ms Sherrington's argument "has no merit."

Justice John Burns will decide at a later date whether the case will move to trial.

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