An Invercargill school is appealing an order to pay former principal Marlene Campbell $158,000 compensation - a move which has left Ms Campbell staggered.
The Education Review Office began investigating Salford School in 2012 after some staff complained Ms Campbell had bullied them.
The Ministry of Education then appointed a limited statutory manager, Peter Macdonald, at the school.
Ms Campbell was sacked for serious misconduct in March 2014, after almost two years of staff interviews, reports and anonymous questionnaires.
But the Employment Court found the school's decision was not based on specific examples of misconduct, and ordered it to pay her $158,000.
The school's lawyer, Scott Wilson, declined to confirm the appeal today but ministry head of sector enablement and support Katrina Casey later confirmed it.
Mrs Campbell said she had hoped the school would want to move on, and she would have to sell her house to pay her legal costs if the case went to the Court of Appeal.
"I'm just dumfounded... I guess we always knew an appeal was available to them legally, but we thought they would just pack up their bags and go," she said.
"It doesn't help Salford School move on, and it does start to feel like it's a vendetta."
Mrs Campbell said the government's decision to intervene at the school only caused further tension.
"In education now, statutory interventions are becoming incredibly common," she said.
"I'm currently in contact with 16 principals who are either in an intervention or were in an intervention that resulted in them resigning or being dismissed.
"Principals, in the main, tell me they very quickly become professionally isolated and feel like they've got some sort of professional leprosy."
But Ms Casey said Mr Macdonald "worked hard under difficult circumstances to try and resolve a range of issues at the school".