Australia Post manager 'ran for his life' when confronted by knife-wielding colleague

An Australia Post manager has told an inquest of the day he faced a drunken, knife-wielding colleague and ran for his life.

The post office manager, Brendan Hogan, has described how he had been dealing with Stephen Hodge's erratic behaviour for years until the mentally ill postal services worker snapped and chased him with a knife in Warners Bay, in the NSW Lake Macquarie region, on September 9, 2015.

Two plain-clothes police officers later that day shot dead Mr Hodge, 51, in the post office car park as he refused to drop the knife when advancing towards them.

Mr Hogan told the Newcastle inquest into his death that on the day of the shooting he argued with Mr Hodge who had been drinking and returned late to work after his lunch break.

He said Mr Hodge complained to him in the back office how he did not respect him and that he was suffering from depression.

Mr Hogan said Mr Hodge later left the post office and he assumed he had gone home sick.

But a short time later Mr Hodge returned holding a large knife by his side in his right hand and blood was smeared on his left hand.

Without saying a word, Mr Hodge then raised the knife shoulder high and began walking towards the terrified manager.

"He started to move towards me and I started backing back," Mr Hogan told the court today.

"I was just scared for my life at that point."

Mr Hogan said he backed his way into the main post office area, always making sure he had Mr Hodge in his sight as he pleaded with him to drop the knife.

At one point Mr Hogan called out to the customers in the post office: "He's got a knife, please get away."

Mr Hogan then yelled out to his staff to press the duress alarm as Mr Hodge chased him outside.

Mr Hogan said from the moment he saw Mr Hodge with the knife to the time he started chasing him, Mr Hodge did not say a word.

Mr Hogan managed to get to a back door in the loading bay and lock it behind him as Mr Hodge twice tried to force it open.

Constables Jamie Taylor and Darren Hamilton later confronted the agitated Mr Hodge and pleaded with him to drop the knife before firing five shots.

The inquest continues.