Former Central Coast Council CEO Gary Murphy files defamation case against former Administrator Dick Persson AM
A defamation case has been launched by former Central Coast Council CEO Gary Murphy following the financial crisis of the council.
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A defamation case has been launched by former Central Coast Council CEO Gary Murphy against former Administrator Dick Persson AM.
The case is set down for a directions hearing on February 3 at the District Court in John Maddison Tower in Sydney before Judge Judith Gibson.
It comes as the State Government’s Public Inquiry into the council, which wracked up a half a billion dollar debt, continues with hearings into the crisis conducted in late 2021.
It was October 6 2020 when the council announced it was facing “liquidity issues” and just two months later it was revealed the council had an accumulated debt of $565m over a four year period. This figure included $200m to be paid back for the use of restricted funds.
Mr Persson was appointed Interim Administrator of the council by the State Government. His role was to determine the cause of the crisis and set a pathway to financial recovery.
Mr Murphy was CEO of Central Coast Council from May 2018 until his five year contract was terminated.
The termination was announced by Mr Persson on November 30 2020 just over a month after the financial crisis was announced.
In his 30 Day Report into the crisis, tabled at a council meeting on December 2 2020, Mr Persson stated that Mr Murphy was “aware of this unlawful use of 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.
“The CEO is the ‘accountable officer’, with overall responsibility for financial management. Required performance was not met.”
He released the emails he was referring to at a council meeting in early 2021.
Mr Murphy has stated that he was unaware of the use of restricted funds. He gave evidence at the Public Inquiry in October 2021 before Commissioner Roslyn McCulloch stating that he first became aware of the dire situation of council and use of restricted funds after commissioning a budget review to address the impacts of Covid.
“The Grant Thornton Report was the first occasion where anybody had raised with me the use of, at that stage, internally restricted funds for purposes other than as intended,” he said.
“That prompted me to do a deeper dive and realised it was far worse than that.”
Council has come through the worst of the crisis with Administrator Rik Hart announcing late last year that the $200m in the use of restricted funds had been paid off.
He said the council planned to be solvent and trading profitably by the end of the financial year.
The directions hearing will start at 9am on February 3.
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