A Tauranga college has lost its bid to challenge a report criticising it for throwing out three German students who smoked cannabis off school grounds and outside school time.
Tauranga Boys College admitted it had treated the international students harsher than it would have domestic ones, but said it had the power to terminate a contract with them.
In March 2014, five German students went to a Tauranga park and smoked a joint. When the school found out two were kicked out, one withdrew and two were allowed to stay.
The school asked a judicial review of a confidential but critical International Education Appeal Authority report, which, months after the boys returned to Germany, upheld complaints by two of their families.
But that request has now been rejected a judge at the High Court in Wellington.
In a decision this week, Justice Rebecca Ellis said the IEAA had correctly found the school had acted unlawfully and that the contracts the boys had did not override the law.
But the judge did find the IEAA had breached natural justice by failing to give the school a chance to respond before releasing its decision.
While the boys would not be returning to New Zealand for schooling, the issues of whether part of their fees could be refunded and their records cleared had to be resolved, Justice Ellis.
"There is no reason now for TBC not to comply with the remedial directions the IEAA has made and it should so forthwith," she said.
The school earlier also admitted it was wrong for a staff member to threaten a 16-year-old, who spoke little English, with a drug test at the local police station.
However, its lawyer, Rebecca Dickson argued there were gaps between the Education Act, which only allows a state school to discipline for acts on school grounds, and the pastoral care code for international students.
The school had a contract with the students' parents to follow the school rules.
The student's transgressions might not have offended their home stay families but the school - with its pastoral care responsibility - should still be able to cancel the contract, she said.
However, the appeal authority's legal representative in court, Jason McHerron, said the school's board had not even cited the contract when deciding to exclude the students.