 In 1864, a dispute regarding financial support for the school by the district council, led to the abrupt closure of the school by Mr Ham and he ceased teaching in order to open a general store in the town.Boys returning from their holiday in July 1864 discovered that their school house had been let to another tenant and their schoolmaster had become a haberdasher.Public concern was such that a committee was formed, which decides that St Michael's Grammar School should assume the mantle of Prospect House Academy by accepting the status of a government-aided school.