A man the defence has accused of killing Christine and Amber Lundy was babysitting his flatmate's child the night they died, the High Court at Wellington has been told.
Mark Lundy, 56, is accused of murdering his 38-year-old wife and seven-year-old daughter, whose bodies were found in their Palmerston North home on 30 August 2000; the Crown claims Mr Lundy killed his wife for her insurance money and Amber because she saw what he was doing to her mother.
Mrs Lundy's brother, Glenn Weggery, found the bodies and on the second day of the trial the defence accused him of being responsible for their deaths - something he vehemently denied.
Mr Weggery's flatmate at the time, Joanne Ridley, yesterday said Mr Weggery babysat her four-year-old son until about 11.30pm on 29 August and that she was then on the phone until about 2am; she did not hear Mr Weggery moving around the small unit at all during the night.
However, the next day Ms Ridley found a small blood smear on a bathroom towel which looked as if someone with blood on their hands had washed them and then dried them on the towel.
"It wasn't really that concerning to me. It was a fleeting thought. After the event you kind of second-guess yourself all the time," she said.
Ms Ridley became aware of the deaths and her girlfriend questioned whether Mr Weggery could have been involved, prompting the pair to go into his bedroom and examine his clothes and boots. They found nothing unusual.
Mr Weggery later told the pair of finding the bodies and "understandably he was upset", Ms Ridley said.
"Every so often he would cry because he was overcome with emotion."
Ms Ridley agreed with the defence she had described Mr Lundy to police as a "jolly, kind of big, happy guy" and that she had seen him being kind and affectionate to his wife.
"She's (Mrs Lundy) not jolly like Mark is, she's more of a businesswoman than a housewife."
Yesterday the jury was shown a recording of Mr Lundy's interview with Detective Inspector Stephen Kelly, who in 2000 was a detective sergeant in Palmerston North.
Mr Lundy was formally cautioned at the start of the interview and, as it progressed, Mr Kelly told him he believed he was responsible for the killings.
He then said he had to show him photos of the crime scene, that "the day has come, we've got to do it" and to "steel yourself".
Mr Lundy screamed and sobbed as he was shown the photos.
"God I hate you now, I really do. God, you're going to show me her (Amber) now too, aren't you," Mr Lundy said.
"F***. That really pisses me off."
Earlier in the interview, Mr Kelly had put it to Mr Lundy that witnesses had told police the couple were not as close as they had been and that, if he was to summarise the Lundys' relationship he would say it was not loving.
Mr Lundy responded: "You think that I killed them."
Mr Kelly: "At the moment, yes I do. I believe that at the moment. How do you feel about that?"
Mr Lundy: "Bloody terrible to be honest. I'm lost for words. That's got to be the most heinous thought that I could come up with."
Mr Lundy said he had told a number of people he really liked Mr Kelly and that he was a top bloke - "until now".
The prosecution yesterday finished presenting its evidence, and the defence will continue its case today; some defence witnesses have already appeared during the past six weeks.
The case is expected to conclude by Easter.
*Clarification - For the avoidance of doubt, please note that Radio New Zealand reporter Sharon Lundy is no relation to Mark Lundy.