Two men have been accused of committing the murder in concert - Darcy McNamara, 44, pleaded guilty yesterday, while Phillip Dunn, 60, has said he wants to contest the charge at trial.

Graphic details of what the prosecution do believe happened were revealed in the Supreme Court by prosecutor John Dickie on Friday.

Mr Day, 41, died when a weapon was used to inflict a 90mm long and 20mm deep stab wound in his neck on July 26, 2018 while he was near the foot of the bed in McNamara's bedroom.

"Either Mr McNamara or Mr Dunn inflicted the wound intending to kill Mr Day. Mr McNamara is the less complicit in the murder," Mr Dickie said.

"He at least encouraged, assisted or directed Mr Dunn to assault Mr Day and at the time was aware that it was probable that in the course of carrying out the assault, Mr Dunn would kill or cause really serious injury to Mr Day."

This caused blood to splatter on the walls and a pool of blood to gather on the floor, which after an attempt to be cleaned, was covered with a rug.

McNamara's barrister Jarrod Williams said his client pleaded guilty on the basis he encouraged and assisted Dunn to kill Mr Day - which has been denied in court by Dunn.

He argued McNamara was less culpable for the murder than Dunn.

Police were told different versions of events during the investigation, based on what Dunn and McNamara had expressed to both friends and officers, making it unclear what actually happened.

Asked by Justice Michael Croucher which version was correct, Mr Dickie said "we simply don't know".

After his arrest on September 4, McNamara was questioned for a while before taking a sleep in the cells, and woke up to write down what he said occurred, saying he "had been living in turmoil, fear, guilt and confusion"

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His version for the court was that he was asleep in his Ryan Avenue home on July 26, after drinking tequila and red wine, and his part in the incident began when he woke to hear Dunn and Mr Day fighting inside the house.

Neighbours called triple zero at about 8pm that evening after hearing someone yell "I'm going to kill you, you're nothing but a dog".

Police did not see any disturbance when they drove past.

The court heard McNamara told police at one point that Dunn allegedly had a paint scraper with him at the time of the murder, but knives were also found dumped by the creek near the Ryan Avenue house.

Dunn was allegedly seen by a friend later that night with blood on his hands and shoe.

"Clearly a sharp implement of some description was used, but the prosecution is unable to prove when it was produced, who produced it and who inflicted the fatal wound," Mr Dickie said.

Mr Day's body was found buried in a shallow grave in the yard of McNamara's home on September 5, with old chairs and other rubbish piled on top.

His pants were pulled down to reveal his boxers and his hair and hip were not completely buried.

"The way the body was left was lacking basic decency and humanity," Mr Dickie said.

The court heard there was a history over a couple of years of Dunn, McNamara and Mr Day arguing, damaging each other's homes, threatening to kill each other and making up and drinking alcohol together.

"At various times, the three of them had been friends, they had borne grudges, there had been incidences of animosity and even violence between them," Mr Williams said.

He argued that although a lengthy term of imprisonment was inevitable, McNamara should receive a "substantially lesser penalty" that Dunn, who he alleged was the "principle actor" in the murder.

The court heard McNamara suffered post-traumatic stress disorder from his "tragic" background that involved drinking and domestic violence between his parents and used alcohol to try to deal with his issues.

"There is no doubt that on the day of this offending, he was intoxicated," Mr Williams said.

Mr Dickie said a sentence of about 20 years was common for murder cases.

"Mr McNamara must be sentenced in a way that reflects the shocking nature and seriousness of the crime," he said.

"The life of Nathan Day was taken away for no good season."

The family of Mr Day watched the Supreme Court hearing on Friday via video link.

Lawyers for accused murderer Phillip Dunn have been told that if they want a judge-only trial in his case, they had better apply quickly.

Coronavirus restrictions delayed the jury trial in the case of Dunn, 60, which had originally been scheduled for earlier this year.

Justice Michael Croucher said a trial before a jury - either in Melbourne or Shepparton as COVID-safe locations for jury members - could not occur until 2021.

Special Victorian legislation that allows for judge-only trials requires the trial to start by late-October.

"If you were going to make an application, you'd better do it soon," Justice Croucher said.

Dunn's barrister Diana Price said she was still in discussions with the prosecution about the case and had not yet made a decision about a judge or jury trial.

In the case of a jury trial, evidence from three witnesses will be pre-recorded in Wangaratta and played in court later, but no date has been set.

"Frankly, I'd rather do it sooner rather than later because the longer you leave these things, the harder it is to remember," Justice Croucher said.

Dunn has pleaded not guilty to murdering Wangaratta man Nathan Day, but in a plea hearing on Friday, was described as the alleged co-offender of Darcy McNamara, 44.

McNamara had told police that "he had been played like a record" by Dunn.

"He thought of Mr Dunn like a mentor or a father figure. (McNamara) said that he was now devastated about the whole circumstances, that it had been a whole weight over his shoulders and for years, he had been betrayed, manipulated, frightened and intimidated," Crown prosecutor John Dickie said.

Dunn's case was adjourned for two weeks.