Giving evidence in the NSW Supreme Court on Tuesday, Wayne Morris said he was sitting on his lounge watching football when he heard a woman screaming and went to look through his front door's peephole.

Mr Morris said he saw a woman on the ground holding her hands up and trying to defend herself as she was stabbed at least three or four times.

"I heard a loud scream and it was a lady's voice and she was screaming out ... And then I looked through the peephole and I saw a person in dark clothing going like that with a knife ... stabbing in a downwards motion," Mr Morris said as he acted out what he had seen in front of the court.

Monis' girlfriend Amirah Droudis has been charged with stabbing his ex-wife 18 times and setting her dead body on fire in the stairwell of the apartment he was sub-leasing in Werrington in April 2013.

Ms Droudis has pleaded not guilty, with her defence team saying she was at her parents' home at the time of the killing and it was possible Monis could have arranged for another person to commit the murder.

Mr Morris, who lived across the hallway from Monis' apartment, told the court that the attacker was a woman and wearing dark, loose "Middle Eastern clothing", which he had originally wrongly identified as a burqa but was in fact a hijab.

He said "everything went quiet" and he then saw the attacker pour a clear liquid from a plastic bottle over the now-still body.

"I was scared. I didn't think it was really happening. I couldn't believe it. And then when I saw her pouring the liquid on the body I was on the top floor so I thought 'I'm in trouble here I need to stop this'," Mr Morris said.

When he opened his door and confronted the attacker, Mr Morris said her face was full of rage and she screamed at him "no, you go back in there".

"She made me feel like I did something wrong … She was very, very in a rage … it was a pretty scary moment," he said.

The woman then doused the body in a liquid, set it alight and fled down the stairs, the court heard.

"There was blood everywhere," he said.

Mr Morris said he had seen a person who was a similar shape and size and wearing a similar garment as the attacker in the unit complex a few months before the killing.

The court heard that when police asked Mr Morris to pick the assailant from 20 pictures shown to him on a computer screen, he did not select Ms Droudis' image although he said at the time he was "100 per cent" certain of his choice.

Another neighbour who lived in the apartment building, Peta Drzewiecki, said that on the afternoon of the murder she heard screaming and thought something was wrong.

Ms Drzewiecki said she saw a woman, with dark coloured cloth covering her hair and throat, wearing dark pants and a top, and carrying a small bag, running down the staircase.

"She was making noises, kind of like a moan or a whimper. Not a cry but that sort of repetitive ... it's hard to describe," Ms Drzewiecki said.

The Crown's case is that Ms Droudis was "brainwashed" by Monis, who was killed in the Lindt cafe siege in 2014, and was "ready and willing" to do his bidding by killing his ex-wife.

Ms Droudis' defence team does not dispute that Monis orchestrated the murder.

Earlier the court heard of the elaborate lengths to which Monis went in order to create an alibi for himself on the day of the murder, including making videos showing the time on the clock, attempting to crash into a police vehicle and telling a friend he saw a man taking photographs outside his house.

After the killing, Monis also wrote to police proposing suspects and giving "lengthy explanations" for their possible motivations.

The trial continues.