Accused NSW killer's notes were 'crazy'

A Sydney builder was in the grips of delusional psychotic ideas when he wrote notes about torturing a missing man, his murder trial has heard.

Elefterios "Terry" Fantakis, 43, pleaded not guilty to killing his neighbour Elisha Karmas in August 2011.

The 52-year-old's body has never been found.

During his trial, the NSW Supreme Court jury was told a diary belonging to Fantakis contained bizarre entries that described how he kicked the victim off his feet and punched him in the throat.

But his lawyer Iain Todd dismissed the writings as "crazy talk" from "a mind that is detached from reality".

At the time, Mr Todd argued, Fantakis suffered deteriorating mental health, and the material included notes of people being involved in heinous crimes and thinking a bug was planted in his head.

The trial continues.