Chief Crown Prosecutor Gavin Silbert, SC, told the Supreme Court yesterday that Michael O'Neill strangled Mr Rattle as an "act of financial self preservation".

Mr Silbert said O'Neill was trying to cover up for his incompetence, which had been threatening to bankrupt the interior designer's business.

O'Neill, 48, had told "a cock and bull story" to police for more than five hours after his arrest before confessing to having killed Mr Rattle on December 4 last year at the couple's South Yarra apartment and setting fire to the property four days later to try to cover up the murder.

O'Neill admitted having taken a saucepan from the kitchen at about 6am and striking Mr Rattle, 53, over the head before wrapping a nylon dog lead around his neck.

Mr Rattle begged for his life as he was being strangled.

O'Neill has pleaded guilty to one count of murder and one count of arson.

Mr Rattle's mother, Jill, in an emotional victim impact statement read to the court during the pre-sentence hearing, said O'Neill called her after the fire to claim Stuart had been trapped upstairs and could not escape.

Mrs Rattle said she believed O'Neill's story and kissed and hugged him to try to comfort him.

She was shocked to have been betrayed by the man her son had loved so much.

Defence barrister Ruth Shann told the court O'Neill was a sad, inadequate, deeply dysfunctional man who had been living a lie since he was five years old.

Ms Shann said O'Neill, who came from a working-class family in Ireland before emigrating to Australia when he was four, had never come to terms with his sexuality and had been bullied because of it for most of his life.

O'Neill lived in two worlds - an internal solitary and frightening world and the outside world where he gave the impression everything was fine.

Ms Shann said O'Neill was targeted when growing up because he was effeminate, neat and did not play sports.

O'Neill developed a mechanism where he told lies to avoid disappointing people.

He had never told his family he was gay.

"For Michael, being gay has been a shameful mistake," Ms Shann said.

The defence barrister said that when they met Mr Rattle was everything O'Neill wasn't - strong, confident, capable, successful, and a creative genius whose career was on the rise. O'Neill had been a waiter at the time.

"Michael was swept into Stuart's world," Ms Shann told Justice Elizabeth Hollingworth.

For 16 years the couple had been involved in a loving but deeply imbalanced relationship where Stuart liked to be in control and O'Neill liked to be controlled.

Ms Shann said O'Neill was suddenly mixing with the high society of Melbourne among Mr Rattle's wealthy clients.

But O'Neill was not treated as an equal by Mr Rattle, more like an assistant.

The defence barrister said everything revolved around Mr Rattle, and O'Neill never revealed to even his closest friends any vulnerability, weakness or feelings of not being able to cope.

O'Neill was one half of the "perfect couple" and the couple's image and brand were important to both of them.

Ms Shann said the pair had been good-looking, mixed with a social clique from the art world and enjoyed a first-class lifestyle but there was "a lot of smoke and mirrors to this world".

Sex was an area of ongoing difficulty and shame for O'Neill as the interior designer was very demanding sexually, the defence barrister claimed.

Mr Rattle would regularly demean and belittle O'Neill in public, saying he wasn't getting enough sex and was planning to send him back to where he came from.

O'Neill was constantly in fear of losing Mr Rattle, who was the anchor to his life.

Ms Shann said the couple had been spending $600,000 to $700,000 a year on a decadent lifestyle, more than double what they were making, and both were to blame for the business being in trouble.

The pre-sentence hearing continues.