Newcastle council has launched an appeal in the Supreme Court after a judge ruled it had unfairly sacked a staffer over her handling of the city's business levy scheme.
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The council's former corporate and community planning manager, Jill Gaynor, won an unfair dismissal case in September after she was sacked by City of Newcastle chief executive officer Jeremy Bath in October 2018.
Acting District Court Judge James Curtis ruled that Mr Bath was "plainly wrong" in his reasons for dismissing Ms Gaynor and foreshadowed that she was entitled to be paid the final 11 months of her five-year contract.
He did not make a ruling on costs, which the Newcastle Herald understands have been significant on both sides and will continue to mount during the appeal.
The matter is set down for mention in the Supreme Court on November 25 and is likely to be heard next year.
A City of Newcastle spokesperson said on Wednesday that the council and its insurers had received legal advice that it had strong grounds to appeal against the District Court ruling.
"City of Newcastle's action was based on independent legal advice as well as the findings of an independent investigation into special business rates accessed by former business improvement association Newcastle Now," the spokesperson said.
"It is important to note that insurers have covered the city's legal costs to date."
The September ruling raised questions over the council's rationale for reviewing its business improvement associations (BIAs) and excluding Newcastle Now from the scheme.
Mr Bath cut off money to Newcastle Now, the city's largest BIA, in July 2018, claiming it had not been submitting business plans as required under the terms of its 2011 funding deed.
The council then engaged a consultant, Centium Group, to investigate Newcastle Now's funding, which led to the sacking of Ms Gaynor and economic development facilitator Greg Fenwick.
The council said the Centium report had been "prompted by the discovery that around $7 million has been paid to Newcastle Now without a business plan submitted or approved".
The council then restructured the BIA scheme, excluding Newcastle Now and Hamilton Chamber of Commerce from applying for funding, after another report by consultants AECOM referred to "poor financial disclosure relating to BIAs".
But Judge Curtis said Newcastle Now had submitted adequate business plans from 2012 to 2017 and it was "wrong of Mr Bath to suggest otherwise".
Mr Bath had also been "plainly wrong" in accusing Ms Gaynor of wrongfully approving Newcastle Now money be spent on Nobbys Lighthouse.
Judge Curtis also took issue with the Centium report, which had found Newcastle Now's financial reporting was in breach of its agreement.
Mr Bath has referred in the past to Newcastle Now's "inappropriate use" of funds and "discrepancies" in how it has accounted for spending.
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Michael Parris
Michael Parris reports on politics for the Newcastle Herald. He started at the Herald in 1994 after working in the ABC Newcastle newsroom. Michael spent much of his career as a sub-editor before moving into political reporting in 2017. He was a finalist in the Sports Australia national media awards for his stories about a male-only tennis club in Newcastle. He has covered NSW and federal elections, state and federal budgets and local politics. He has also written extensively about the COVID-19 pandemic with a special focus on data analysis and the effects of lockdowns on the Hunter community.
Michael Parris reports on politics for the Newcastle Herald. He started at the Herald in 1994 after working in the ABC Newcastle newsroom. Michael spent much of his career as a sub-editor before moving into political reporting in 2017. He was a finalist in the Sports Australia national media awards for his stories about a male-only tennis club in Newcastle. He has covered NSW and federal elections, state and federal budgets and local politics. He has also written extensively about the COVID-19 pandemic with a special focus on data analysis and the effects of lockdowns on the Hunter community.
