A pedophile NSW Hunter Valley Catholic priest was retired for "health" reasons, given a one-way plane ticket to England and paid an on-going "food allowance".
The secret deal involving Father Denis McAlinden was done in February and March 1993.
But the priest second-in-charge of the Maitland-Newcastle diocese at the time, Monsignor Allan Hart, said he knew nothing about it, a special commission of inquiry in Newcastle heard on Friday.
Msgr Hart said the now dead bishop of the time, Leo Clarke, must have decided without consultation to remove Fr McAlinden's right to operate as a priest.
Barrister assisting the commission, Julia Lonergan, SC, showed Msgr Hart a decree and letter, signed by Bishop Clarke and dated February 27, 1993.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
Ms Lonergan said the letter began with the words "In light of your health I hereby confirm your retirement from priestly ministry".
"Are you aware of any health problems Fr McAlinden may have had?" she asked Msgr Hart.
"I don't know any," he answered.
"And this reference to health in the first sentence of the letter, could it be a coy way to refer to his propensity to the sexual abuse of children?" she asked.
Msgr Hart answered "Yes".
But he said he had no knowledge of a one-way ticket to the United Kingdom Fr McAlinden used around March 25, 1993.
He found out afterwards that the diocese's central clergy fund had paid for the ticket, he said.
He did not know of the diocese paying any other airfare for priests.
But if it had happened it would have been "most exceptional", he said.
Ms Lonergan showed Msgr Hart other documents and asked whether he was part of an administrative team at the time running the diocese's sick and retired priest's fund.
Msgr Hart said sick and retired priests were entitled to a "food allowance" through the fund but said this was organised by two other priests.
Earlier in the day, Msgr Hart said he was unaware of any confidential files held by the diocese leaders involving allegations of sexual abuse by the region's priests.
He only learned of their existence when he went to Sydney this year to discuss his evidence to the commission with a legal representative, he said.
The inquiry, being heard by commissioner Margaret Cunneen in Newcastle Supreme Court, is looking at how church leaders and police handled allegations of sexual abuse by two priests, McAlinden and James Fletcher.
The inquiry continues next week.
