The former head of religious studies at the Adass Israel School in Melbourne's eastern suburbs was stood down in March 2008 over complaints made by sisters Nicole Meyer, Dassi Erlich and Elly Sapper.
Leifer, a 56-year-old mother of eight, has pleaded not guilty to 29 charges of sexual abuse, including rape, and is standing trial in Victoria's County Court.
Esther Spigelman, the then-head of general studies, was at the board meeting where Leifer was stood down and told the court on Tuesday that Leifer had been in tears.
Leifer said she had done nothing wrong and that what was happening to her was unfair, Ms Spigelman said under questioning by Leifer's defence barrister, Ian Hill KC.
It's alleged Leifer sexually abused the sisters, both when they were students at the school and when they returned as religious studies teachers after graduation.
Earlier, Jennifer Measey, the current head of school at Adass Israel, told the court Leifer's duties included looking after the welfare and education of the girls at the school.
The reason for the school's existence was to educate students in the philosophy and ethos of the ultra-Orthodox Jewish religion, she said.
Leifer's job included making sure any materials given to students was appropriate according to the ethos and philosophy of the school, and Ms Measey said students looked to Leifer as having "total top authority" over those matters.
Work sheets, books or presentations to students would be reviewed by Leifer for material that might be against the school's philosophy, the court heard.
"Either the words would be covered or the person who would be presenting would be asked not to speak about certain parts of their presentations," Ms Measey said.
"Some of the books had pages taken out, or books were just not accepted totally if they were not appropriate."
Teacher Sharon Bromberg said students at the school generally didn't have contact with anyone outside the ultra-Orthodox community.
She said students would usually spend time with classmates or relatives, did not have televisions or newspapers at home, there was no sex education at the school and there was segregation between the sexes, as children and into adulthood.
Mr Hill suggested as girls got to years 11 or 12 they became more curious about the outside world, but Ms Bromberg said she wasn't sure of that.
"Do you know some person by the names Mary-Kate and Ashley Olsen?" Mr Hill asked.
"No," Ms Bromberg replied.
Mr Hill suggested girls were going to the nearby Elsternwick library or had been looking at videos on their computers of American actresses or films.
"I wasn't aware of that," Ms Bromberg said.
The trial is continuing.
