It was 12.45pm on November 24, 2017, and at that moment 91-year-old grandfather and former airman, Bernie Farrell, was crossing Stedman Street on his way to get a haircut.

The rental car Matheson was driving struck Mr Farrell in the middle of the road, sending him "flying" into the air before he landed face down on the roadway, suffering multiple serious injuries.

Matheson slowed briefly, swerved to the right and drove around Mr Farrell's body before fleeing the scene. Mr Farrell died in hospital three days later and for the best part of the next two years his family waited for the phone call to say the driver had been arrested.

Matheson appeared in Newcastle Local Court on Wednesday and pleaded guilty to dangerous driving occasioning death - drive manner dangerous and fail to stop and assist after vehicle impact causing death.

And in the wake of his guilty pleas, the Newcastle Herald can reveal the lie Matheson told detectives in 2018 that led to the extensive delay in the case and only added to the heartache for Mr Farrell's family.

Matheson was first spoken to by detectives in March, 2018, but it wasn't until September, 2019, that he was arrested at Wellington correctional centre and charged over Mr Farrell's death.

Detectives had found the hire car - a red Mitsubishi ASX - which Matheson had returned to a company at Williamtown the day after the hit-and-run crash.

They had traced the car back to Matheson and found DNA on the bonnet that matched Mr Farrell.

And when they interviewed Matheson he told detectives that an acquaintance of his - a man he said he had met in jail and who was known as "Jamie" or "JR" - was driving the car on the day of the crash.

That lie meant police had to undertake the exhaustive process of eliminating 354 potential persons of interest.

Ultimately, when police could find no results matching the name and description of "JR", as provided by Matheson, they went back to speak to him at Wellington correctional centre.

This time - nearly two years after the hit-and-run crash - Matheson came clean, even owning up to things the police couldn't prove, including that he was under the influence of ice at the time. Matheson - who remains behind bars after a failed bail bid in December as his last jail term was about to expire - will next face Newcastle District Court in June to get a sentence date.