Lundy joked about prostitute 'alibi': brother

Mark Lundy joked about the Wellington prostitute being his "alibi" just days after his wife and daughter had been found dead, a court has heard.

The Crown said Lundy spent August 29, 2000, visiting clients around Wellington for his kitchen sink business and hired a prostitute while staying in a Petone motel late that night.

He then drove back to Palmerston North in the early hours of the morning to allegedly hack his wife Christine and 7-year-old daughter Amber to death with a tomahawk.

He was not arrested by police for some time and Lundy was taken for a boozy lunch by his brother Craig and sister-in-law Andrea on September 4 - four days after the alleged murder - during which the defendant made some disclosures "out of leftfield".

"He told us that he had got a bottle of rum and drunk about half the bottle. He was celebrating; I assumed it was a work-related thing," Craig Lundy told the High Court at Wellington.

"Later that night, he had called a prostitute, and had used one on four occasions prior to that."

Mark Lundy called the visit from the prostitute "a cashie" and Andrea Lundy remembered the brothers joking about the scenario.

"Craig said, 'I suppose that's your alibi'," she told the jury.

"[Mark] made a joking sort of statement, saying, 'Yeah, I finished with her and drove back to Palmerston North.' It was in a sarcastic tone."

During the lunch, the defendant also raised "spontaneously" the issue of the physical relationship between him and his wife.

"He mentioned that once they found out they couldn't have children, Christine went off sex and it was up to three months without having sex," , Craig Lundy said.

On the same day, Lundy informed his brother he had "bumped up" his and his wife's life insurance policy from $200,000 to $500,000 in the weeks before the deaths.

He explicitly said it was not a "motive" for murder and his lawyer David Hislop, QC, suggested it was to cover the liability of their new Hawkes Bay winery venture.

Witnesses yesterday also gave evidence of the severe financial pressure Christine Lundy felt at the time of her death.

Her sister-in-law Maria Norrelle said the defendant had been trying to secure investment in the vineyard but people - including an uncle in Queensland - had pulled out.

"The last time I remember it being discussed was late at night. Mark mentioned that Christine wasn't sleeping well but he wasn't worried about it," Ms Norrelle said.

"He used the word bankrupt."

She also said Lundy's wife wanted to "change their lifestyle".

"She was concerned about the cost of partying and the influence it would have on Amber.

"She had said she wanted Mark to give up drinking for three months to see if he could."

Crown and defence argued legal matters for the rest of the day which cannot be reported.

The trial before Justice Simon France is expected to continue for another two months.

Key points

• Mark Lundy joked with his brother Craig Lundy, four days after the deaths of his wife and daughter, about using a prostitute as an "alibi".

• Lundy told his brother he had used prostitutes on four previous occasions and his wife had not had sex with him for three months.

• Christine Lundy was concerned about the financial pressure placed on them by the Hawkes Bay winery venture and was not sleeping.

• Lundy mentioned bankruptcy in the weeks leading up to the alleged double murder.

• Christine Lundy was concerned about her husband's drinking habits and wanted to "change their lifestyle".