Former Central Coast Council CEO Gary Murphy drops defamation case against former Administrator Dick Persson AM

The defamation case lodged by former Central Coast Council CEO Gary Murphy against former Administrator Dick Persson AM has been dropped. Read the latest from court.

Former Central Coast Council CEO Gary Murphy has dropped his defamation case against former Administrator Dick Persson AM.

The matter was mentioned before the Sydney District Court on Thursday with Judge Judith Gibson advised that Mr Murphy had lodged a “notice of discontinuance”.

“A notice of discontinuance was filed this morning … so that’s the end of this client,” Mr Murphy’s barrister Tim Senior told the court.

Mr Senior said the case was never served on Mr Persson and had a number of adjournments since it was lodged.

Central Coast Council CEO Gary Murphy has pulled out of the defamation case. Picture: Sue Graham

Judge Gibson commented “another fight averted” when the matter was finalised.

It comes as the State Government’s Public Inquiry report into the financial crisis at Central Council Council, which wracked up a half a billion dollar debt and used restricted funds, was released last week with councillors sacked.

When news of the council crisis broke in 2020, Mr Persson was appointed by the State Government to set things straight and discover how council landed in the mess. One of his first actions was terminating Mr Murphy’s contract in November 2020.

In his 30 Day Report into the crisis, Mr Persson said Mr Murphy and the former chief financial officer Craig Norman were aware of the unlawful use of restricted funds.

Former Administrator Dick Persson AM maintained that Mr Murphy knew about the use of restricted funds.

“While the exact time they became aware remains hard to ascertain, emails and notes indicate they continued to spend funds unlawfully after they became aware and before they advised the elected body,” the report stated.

Mr Persson then released five emails/file notes in early 2021 which he labelled “proof” that Mr Murphy and Mr Norman were aware. The emails and file notes contain the words “restricted funds” and make reference to council’s finances.

In an interview with the Express in March 2021 Mr Murphy said while he takes responsibility for the council’s situation as CEO, the documents released by Mr Persson do not show any evidence of wrongdoing and had been taken out of context.

“I was quite furious and disappointed when the administrator decided to release the information with no context,” he said.

One of the file notes released by Mr Persson in early 2021.

“The Administrator has made a lot of comments about the fact that I knew about the use of restricted funds. That’s not correct, what I did know was that COVID-19 was going to have a huge impact on Central Coast Council.”

He said council’s finances were discussed in the notes and emails as they worked through impacts of Covid and other issues, with the reference to restricted funds not uncommon.

“There’s nothing unusual about my reference to restricted funds,” he said. “The realisation of the inappropriate use of restricted funds was only made known to myself and the executives in October.”

He said Mr Persson’s message to the public was that “the problems were caused by the CEO, I have got rid of him and there’s nothing more to see here”.

When Mr Persson gave evidence at the Public Inquiry hearings, he was cross examined by Mr Murphy’s legal counsel and maintained his position firmly.

“I believe it was clear that there was an awareness of this issue,” he said. “It’s inconceivable that a CEO would not have known.”

In the Public Inquiry report, Commissioner Roslyn McCulloch did not determine who was responsible for the use of restricted funds, however stated that the former CFO Mr Norman “ought to have knowledge of the cash position of the council and balances of restricted funds”.

“Somewhat controversially, Mr Persson alleged that the former CFO, Mr Norman, and the former GM, Mr Murphy, were aware of this unlawful use of funds,” the report stated.

“As I am aware that this issue is likely to be determined by a Court of record, I will not venture an opinion as to the state of Mr Murphy’s knowledge as to the use of restricted funds for unlawful purposes prior to his receipt of the Grant Thornton Phase 1 Report on 4 June 2020.”