Former hospital orderly Colin Earl Graham was charged with the cold case murder of a nurse more than 30 year ago, but his lawyers say another suspect still hasn't been ruled out.
The body of 25-year-old Ina-Doris Warrick was found in her North Ringwood home in 1986 four days after her death. She had multiple stab wounds in her back.
Ms Warrick was due to return for her first night shift at Heidelberg hospital following a year off after the death of her husband from cancer.
Graham, a former hospital porter, was arrested and charged with Ms Warrick's murder in November 2018, nearly three years after cold case re-investigations began.
He applied for bail in Victoria's Supreme Court on Tuesday where his lawyer Malcolm Thomas said the man, now in his 60s, had a strong chance of acquittal.
Prosecutors would have "great difficulty" excluding the possibility that Ms Warrick was actually killed by a doctor, Greg Stewart.
He said Dr Stewart's behaviour around the time Ms Warrick's body was discovered was consistent with a person who had a "consciousness of guilt".
Mr Thomas said the doctor had perjured himself in his first statement to police, feigning a lack of knowledge about Ms Warrick's death.
In a later version of events he indicated he knew Ms Warrick was dead, Mr Thomas said.
He said that, combined with lengthy delays in Graham's case through no fault of anyone, amounted to exceptional circumstances that should see him released on bail.
Graham was originally meant to stand trial in March this year but coronavirus forced it to be postponed first until November, and now until August 2021.
He will have spent nearly three years in custody if he is not released.
Mr Thomas said Graham knew for some time that Ms Warrick's death was being re-investigated and more than two years passed between him being spoken to by police and his arrest.
Despite that knowledge he made no effort to flee interstate or overseas.
The court heart Graham had no real prospects of employment and attempts to get a surety were frustrated by his lack of financial means.
But Mr Thomas said the flip side of that was that Graham didn't have the means to leave the country legally, let alone by nefarious means.
The application is continuing.
