Under state law, professionals such as doctors, teachers and school principals are required to report any instance of suspected child abuse. Failing to report an offence carries a penalty of a $1000 (Pounds 400) fine.
The magistrate heard that the principal had failed to notify child protection workers about the possible case of incest.
A classroom teacher had earlier told her that a five-year-old boy had indicated he was being sexually abused by his father. The principal asked the teacher to keep the matter quiet and later interviewed the child but concluded that the boy had "a very big imagination". Two weeks later, however, the teacher made an official report to child protection workers when the child mentioned that the abuse had started again.
Welfare workers and police investigated and the boy's father was sentenced to nine years in prison.
A lawyer for the principal told the court that his client was not guilty of an offence because, although the defendant had suspected the child was a victim of abuse, her suspicions had not been confirmed.
The magistrate criticised the legislation, saying teachers were receiving mixed messages.