Crown prosecutor Michele Williams, SC, told a Supreme Court jury on Thursday that Easton Woodhead attacked and killed Morgan Wayne 'Mouse' Perry at Enterprize Park, near the Melbourne Aquarium, on January 5, 2014.

Mr Woodhead, 20, has pleaded not guilty to murdering Mr Perry, claiming he was mentally impaired at the time.

In her opening address to the jury, Ms Williams said Mr Perry, 42, was homeless and living under the rail bridge at Enterprize Park beside the Yarra having been on the streets since he was 15.

The prosecutor said Mr Perry, who had lost touch with his family, stole Mr Woodhead's black 1988 Honda motorcycle some weeks before the alleged murder.

Ms Williams said the motive for the killing was that Mr Perry had stolen Mr Woodhead's $6500 motorcycle. She said Mr Woodhead had walked to Enterprize Park about 5am on January 5 and found his motorcycle under a cover.

Finding it altered mechanically, he woke several homeless people and demanded they help him restart the motorbike, the prosecutor said. When Mr Perry told him to "p--- off" or "f--- off", Mr Woodhead produced a knife and began waving it as he spoke angrily.

Ms Williams told Mr Perry his friends "are going to have to watch you die here" unless he helped him. Soon after, he jumped on Perry and inflicted a series of stab wounds to the man's face, chest, hands and back, the jury was told.

Mr Perry died in hospital that day. Ms Williams said Mr Woodhead dumped the knife as he walked from the scene, before he was arrested on the night of January 6.

Mr Woodhead had been 19 at the time and a former Melbourne Grammar student who completed his VCE in 2012.

Ms Williams said Mr Woodhead had been set up by his mother in a 15th floor city apartment in Flinders Street near the aquarium in early 2013 and the jury would hear evidence from his school friends how he would spend a great deal of time there taking drugs and painting.

The drugs included marijuana and LSD.

One of the issues during Mr Woodhead's trial would be his mental state at the time of the killing and the jury would hear from a number of psychiatrists.

"Our case is he might have been mentally ill through taking drugs or whatever other cause, but he had his wits about him and knew what he was doing," the prosecutor said.

She said that during 2013 Mr Woodhead's friends noticed a change in him.

"His mood changed, he became variously described as spiritual, arrogant, caught up in his own image, full of aggression. Somewhat obsessed with joining the SAS, apparently," Ms Williams said.

Ms Williams said the theft of Mr Woodhead's motorcycle angered and infuriated him and he told a friend if he ever caught the thief he would use his knife on him.

The prosecutor revealed Mr Woodhead bought two knives - a survivor combat knife for $99 and a folding knife for $36 - in December 2013 from a Little Bourke Street store.

Mr Woodhead then bought another two knives between New Year's Day and January 3 and told the shop attendant he had shaved his head because it was a new year.

Ms Williams said Mr Woodhead argued with his then girlfriend, Arielle Thomas, the day before Mr Perry was killed when she went to Portsea with their friends.

The prosecutor said the couple communicated via Facebook during the day and Mr Woodhead's messages to her might give the jury an insight into his state of mind.

"Arguing with his girlfriend. We'd say nothing delusional about that."

Ms Williams said Mr Woodhead and his neighbour played computer games in the early hours of January 5, and that the accused seemed fine to the neighbour. Mr Woodhead smoked marijuana and sipped Jagermeister while with his neighbour.

About 4.42am Mr Woodhead was captured on CCTV cameras leaving his building, before he walked to Enterprize Park.

The trial, before Justice Jane Dixon, continues.

With Adam Cooper