A Supreme Court judge warned a jury to be cautious about the evidence given by a criminal associate of murdered underworld boss Carl Williams who claimed the killer told him drug squad detective Paul Dale was his contact inside the Victoria Police department.
Justice Elizabeth Curtain said Tuesday the associate, known as witness B, gave evidence on Monday about conversations he had had with Williams, in particular at Albert Park "about Paul Dale being his source".
Justice Curtain said this was "hearsay" evidence which the law regarded as potentially unreliable.
She said the jury had not had the benefit of Carl Williams giving evidence in court that that was what he said.
"So you can't assess his [Williams'] reliability, credibility and demeanour if he were here to give that evidence," Justice Curtain told the jury.
"It's given by the person who says it was said to him.
"So you can see that there is a potential unreliability in that evidence.
"It may be that Carl Williams – assuming that you accept it was said – it may be that Carl Williams was not telling the truth, that he may have been exaggerating the situation.
"He may have been lying to witness B.
"It may be that witness B has misheard it, is mistaken in what was said.
"And, of course, it may be ... that witness B himself is lying about the incident having occurred or lying about Carl Williams having said those things to him."
Witness B claimed on Monday that Williams told him Mr Dale was his police contact who would let him know if he was under police surveillance.
Mr Dale, 43, has pleaded not guilty to 12 charges of lying to the Australian Crime Commission about his relationship with Williams.
He is alleged to have lied while he was being examined by the ACC in March 2007 and November 2008 by stating that his only contact with the gangland figure was in a professional capacity twice in 2003, in addition to a chance meeting.
He is accused of having an ongoing "secret relationship" with the underworld killer – who was murdered in jail in 2010 – which included Dale disclosing confidential police information for cash.
Witness B, giving evidence via videolink from prison, told the jury he had never met Mr Dale but he was pointed out to him one day when he was in Albert Park in August 2003.
He said Williams went over and spoke to Mr Dale before the underworld boss later confirmed that he was the police officer who had been giving him information.
In an earlier statement to police read to the court, witness B said Williams told him: "That's the copper who saved our arse."
The trial continues.