Murder-accused David Bain was lying in a foetal position crying when police broke into the house where his family lay dead, the High Court in Christchurch has been told.
Mr Bain is being retried on charges of murdering five members of his family in Dunedin after an order by the Privy Council in 2007.
The Crown says Mr Bain, 36, murdered his parents Robin and Margaret and siblings Arawa, Laniet and Stephen at the family's home in June 1994.
The defence says Robin Bain killed the family present in the house in Every Street before shooting himself.
Crown witness Murray Stapp told the court on Wednesday he went to the house on the morning of the killings and had to break the glass in the front door because Mr Bain was reluctant to let police in.
Mr Stapp said he ran into the house with his revolver drawn, found Mr Bain lying in a room crying and saying: "They're all dead."
Mr Stapp said after police had walked through the house to find the bodies, Mr Bain appeared to have some sort of epileptic fit before he fainted.
The court also heard from a neighbour of the Bains, who said he knew there was a rift between Robin Bain and his wife Margaret, and that Robin Bain was no longer living in the house.
Wayne Marsh said he did not have much to do with the family, but regarded Robin Bain as a serious and sincere man.
He told the court there seemed to be "some sort of rift" in the family over plans to build a new house.
Mr Marsh said he was aware of issues in the family because he had phoned Robin Bain to ask him to fix faulty spouting on their run-down house.
Mr Marsh said Robin Bain had told him there was no money to build a new house, but Margaret Bain seemed determined that one would be built.
Officer defends investigation
Earlier, a former police officer involved in the original investigation into the killings continued his evidence.
Jim Doyle, a former detective senior sergeant in Dunedin, was cross-examined by the defence about the way he he handled the investigation in 1994, which led to David Bain being charged with the killings.
Defence lawyer Michael Reed, QC, suggested there was a lack of investigation into the possibility that Robin Bain killed the family before turning the gun on himself.
Mr Reed said Mr Doyle's inquiry was one-sided, and ignored or lost potential evidence that pointed to Robin Bain's involvement. That included the incestuous relationship which police had been told about between Robin Bain and one of his daughters, Laniet.
Mr Doyle disagreed, saying though a murder-suicide scenario was considered, the evidence pointed to David Bain being the killer, and the investigation was thorough.
Meanwhile, the former policeman who headed the investigation in 1994 admitted that some samples taken from Robin Bain should have been tested.
Peter Robinson, a former detective chief inspector, said some samples from the homicide inquiry were taken to Australia for further forensic testing.
Mr Robinson told the court that, in hindsight, blood stains and fingernail scrapings from Robin Bain's hands, which were later destroyed, should also have been tested.
The defence says David Bain could have been exonerated if the tests had shown Robin Bain had the blood of his other children on his hands.