Mr Conway, now 47, does not deny stabbing Mr Ward, 56, in his unit in Broadmeadow Road on March 7 last year, but he has pleaded not guilty to murder and claims he was acting in self-defence after Mr Ward picked up a knife and walked towards him.

And so whether Mr Ward had calmed down, was no longer behaving "erratically" and was sitting on a couch when he was stabbed or whether he was standing up, armed with a knife and advancing towards Mr Conway will be the crucial issue in Mr Conway's two-week trial in NSW Supreme Court.

The key eyewitness in the trial gave evidence on Wednesday, telling the jury that while Mr Conway had placed a hunting knife on the couch next to Mr Ward the 56-year-old had not picked it up and was seated on the couch when he was stabbed.

The witness said she had earlier seen Mr Ward inject himself with something before his behaviour changed "dramatically". Mr Ward pulled apart a kettle, barked on all fours like a dog and was rude to the witness and Mr Conway's wife, Katrina Coghlan, the witness said.

Mr Ward, the witness said, began being rude to her - calling her a "slut" and aggressively asking if she thought she was better than him - after she refused his offer to inject herself with drugs.

But before he was stabbed, Mr Ward had sat on the couch and become "quite quiet", the witness said.

Mr Conway, the witness gave evidence, brought out two knives, put one on the chair next to Mr Ward and said "let's have a muck around."

The witness said Mr Ward said he didn't want to and after some back and forth Mr Conway reached across the coffee table and lunged at Mr Ward with the knife, stabbing him once in the stomach.

"Ian was mucking around and just lunged at him with the knife," the witness said. "There was no blood or anything. I didn't think anything of it to be honest."

The witness said Mr Conway "panicked" when he saw Mr Ward's wound and claims he said Mr Ward was going to "dog" and he should "slit his throat".

The trial continues.