For more than a decade, parents have been offering to raise funds for a shadecloth, The Grenfell Record reports.
But Fr Walter, who has legal control over the school property, has refused.
Parents complained to the Catholic Education Office in Sydney and to Sydney Cardinal George Pell without success.
"Fr Walter has told parents the poles are dangerous, while some have been told that studies showed children were suffering from vitamin D deficiency because of a lack of sun," says parent Donna Bristow who has a family history of melanoma.
"We are not fulfilling our duty of care for the children."
NSW Cancer Council's chief executive Dr Andrew Penman said: "There is absolutely no evidence to suggest that providing shadecloth above a school playground would diminish the level of vitamin D exposure required by children in their daily lives."
A Sydney Catholic Education Office spokesman, Mark Rix, said an occupational health and safety audit of St Joseph's found sufficient shade was provided.
He said Fr Walter had made the vitamin D comments out of frustration.
"Fr Walter believes there are other things that the money could be spent on at the school which serves a large lower socio-economic community," Mr Rix said.
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(Source: CTHN)