Blood splatter belonging to the victim was found on the man's pants, on his hands and on the soles of his shoes.
Police statements revealed that when officers arrived at the scene, the man was unemotional and calm.
"The police officer asked (the man) 'are you all right?'," Mr Donnelly said.
"He replied 'yeah I'm good thanks' in a really quiet tone which the officer says was really weird given the circumstances."
When asked by another officer if there was anyone else in the house, the man replied yes, and said he was dead because he had his head cut off.
A mallet and knife were found in the bedroom where the victim was killed.
One police officer described the man as looking right through him.
Psychiatric reports state the man, who was under the mental health system since 2010 and had been diagnosed with bipolar in 2012, had suffered from auditory hallucinations.
These seemed to get worse in the months leading up to the death of his flatmate, after two of his dogs were euthanised for attacking sheep.
The reports, completed after the flatmate was killed, stated the man either suffered from schizophrenia or schizo affected disorder, rather than just being bipolar.
They also disclosed the man heard voices, some of which were degrading and insulted him.
One of the voices, Sparky, talked about his family in a threatening manner, Donnelly said.
It was one of the voices that told him to either take his eye out or take his father out.
Defence counsel Judith Ablett-Kerr said all three report writers had come to the same conclusion - "That (the man) in their view was probably insane at the time of the death of (his victim)".
The man's father had done everything he could to bring his son's condition to the attention of those who were assisting him, she said.
It had taken psychiatrists a lot of time to change the man's diagnosis despite him having auditory hallucinations since 2016.
Earlier blood tests which had revealed the man's previous use of methamphetamine may have caused confusion about what was taking place, she said.
Justice Nation will give his decision tomorrow.
The victim's name is also suppressed.
