Eaton man Ian Dennis is being tried by a judge for murder

A man accused of murdering his drinking buddy by strangling her at his home in Western Australia's south was seen splashing around in mud, talking nonsensically and wandering naked on a highway after the killing.

Ian Dennis Jones, 52, admits he caused the death of mother-of-three Tanya Leah Beattie at his house in Eaton, north of Bunbury, in November 2016, but argues he is not guilty because he was of unsound mind.

The Supreme Court of WA heard on Monday the 41-year-old victim and Jones were seen arguing and fighting outside his house on the night she died, and a neighbour heard a scream about four hours later.

After he was seen behaving bizarrely the next day, police were called and he was taken to hospital.

Jones' mother then went to his house to lock up and found Ms Beattie's body.

Prosecutor Brett Tooker said she had a blood alcohol level of 0.269 and traces of drugs in her system, but Jones was not intoxicated.

He had a long history of mental illness, including numerous hospitalisations and a diagnosis of paranoid schizophrenia, and had earlier in 2016 attempted to choke his sister.

Mr Tooker said Jones' behaviour had been bizarre in the month before the killing and he had formed the belief Ms Beattie was a member of the Coffin Cheaters bikie gang, who he blamed for the death of his son in 2002.

In statements read out to the court, the victim's husband Danny Beattie said his wife had been a registered nurse but became an alcoholic and started using drugs including methamphetamine after she lost her job, having been accused of stealing morphine.

Mr Beattie wrote she had initially described Jones as a "cool guy" but eventually said "he got spooky", was "a nutter" and had killed two people at his house, so she decided to avoid walking past the property on the way to visit her friend Jo.

Jones is being tried before a judge sitting without a jury.