A former staff member at Sydney’s exclusive Knox Grammar School has told an inquiry that then-headmaster Ian Paterson lied about the arrest of a sex offender known as the “balaclava man”.

Stuart Pearson, a former police prosecutor who went on to work as the headmaster’s assistant at Knox Grammar when the incident happened in about 1988, was giving evidence at the Royal Commission into Institutional Child Sexual Abuse.

The inquiry was told that during the incident a student boarder awoke to find a man wearing a balaclava touching him inappropriately from under his bed.

• Knox sex abuser ‘expected to be sacked’
• School’s shocking memorial to ‘molester’
• School a ‘candy shop’ – inquiry
• Knox inquiry: ‘Boys forced to perform oral sex’

The man fled and Mr Pearson began an internal investigation.

Mr Pearson said while he was still investigating the incident, Dr Paterson told the students the matter was closed.

“Whilst I was investigating this matter and had not yet finished my investigations, Dr Paterson assembled the boys at MacNeil house and told them that the matter was over. Closed. Finished,” he said.

“The explanation was a man, an Asian man had entered the place.

“He had been caught by the police, arrested I think was the word used, and was now being dealt with by the police and so the matter as far as the school is concerned is finished.”

Stuart Pearson says no formal report made to police

Mr Pearson told the royal commission he had lost respect and trust in his superior.

“Very shortly after the headmaster spoke to the boys, I felt duty bound to find out whether that was true or not,” he said.

Mr Pearson then rang the police to check if what Dr Paterson said was true.

“There’s no formal report. There’s no formal arrest. There’s no arrest,” Mr Pearson said.

Counsel Assisting David Lloyd asked Mr Pearson if he reported it, especially as he was already on the phone to the police.

“No, I did not,” he said.

“It was not my job … I should have and I didn’t. And I regret that.”

Mr Pearson said he came to the conclusion that Dr Paterson was lying.

“No-one suggested to me that Dr Paterson was lying,” he said.

“I am saying Dr Paterson was lying.”

Mr Lloyd told the royal commission although the face of the person wearing the balaclava was concealed, a number of the students believed the offender was former teacher Christopher Fotis.

“Although the person’s face was concealed by a balaclava, a number of the boys in the dormitory believed that the offender was Christopher Fotis, one of the resident masters in MacNeil House at the time,” he said.

An arrest warrant is outstanding for Mr Fotis.

Dr Ian Paterson is due to give evidence at the royal commission later this week.

– ABC