A woman accused of murdering an elderly man with a frying pan in Sydney's eastern suburbs "called him a dog", and feuded with him over CDs and money.
Giving evidence at the murder trial of her former friend Narelle Fiona Smith, Julia Strafela said her South Coogee neighbour and sometimes lover Peter McCarthy had become irritated with the accused before his death in December 2020.
"Peter told me he loaned Narelle some CDs ... and he was having trouble getting them back," Ms Strafela said.
She could not recall when the issue arose but said the 77-year-old talked about wanting the CDs returned.
The pair also argued over $30 the aged pensioner had loaned to Smith.
When Ms Strafela raised Mr McCarthy in conversation, Smith responded negatively, the Supreme Court jury was told.
"She called him a dog," Ms Strafela said.
"I decided to stop doing that (mentioning Mr McCarthy) as I didn't want to get involved in dramas."
On learning Mr McCarthy was dead on Sunday, December 20, the day his body was discovered in his apartment, Ms Strafela said she went into shock and began drinking at her apartment, before meeting friends for drinks.
She also texted Smith telling her: "Not to worry about the CDs. Peter's dead."
No reply was received.
In the evening, she spotted Smith at Coogee Cemetery yelling at an unknown man, before the pair began talking.
"I was still upset about what happened to Peter," the disability pensioner said.
"I just said ... leave me alone. I don't want to cuddle."
She said Smith became upset and shouted at her.
"She yelled out 'me and my team got rid of him, they'll get rid of you next'."
"I didn't believe it. I just thought she was being stupid. I was numb".
Ms Strafela then left and continued drinking on the beach, before returning home and talking with her friends Donna and Kylie about what Smith had said.
The group then decided they would go to the police.
She later confronted Smith about the conversation in a text message, after TV news reports claimed the accused had been with Mr McCarthy in the week before his death.
Under cross-examination, Ms Strafela said around the time of the alleged murder, she was trying to cut down on drinking, while Mr McCarthy had not.
This did not affect their relationship, but said they had been seeing one another less.
She denied returning to Mr McCarthy's apartment the Thursday before his body was discovered to find Smith and Mr McCarthy together, packing up her belongings.
"I didn't want to get involved - whether they were best friends or worst of enemies," Ms Strafela said.
Neighbour David Edwards told the jury that in early 2019 he had seen Ms Strafela get angry at Mr McCarthy, while a group of neighbours were drinking.
He said he saw Ms Strafela throw a bottle at the pensioner.
Ms Strafela denied this incident occurred, saying she had "never hurt" Mr McCarthy.
Smith has pleaded not guilty to murdering Mr McCarthy after spending the day celebrating her 46th birthday on December 17, 2020.
Mr McCarthy's bloody body wasn't found face-up on the loungeroom floor, loosely covered in a tarp and a jumper, and surrounded by broken furniture, glasses and a frying pan.
Prosecutors allege a man known by Smith used Mr McCarthy's ATM cards after the murder and that Smith herself used his Opal card to travel around Sydney.
On Tuesday, Ms Strafela said she and Mr McCarthy used one another's cards and had exchanged PINs - but said she did not have his PIN memorised.
"I didn't need it," she said
"We would use it (one another's cards) when we were hungover."
The trial continues.
