Teen allegedly told homeless victim that father was a 'werewolf' before fatal stabbing

The former Melbourne private school student accused of murdering a homeless man told his victim that his father was a werewolf before attacking him, a court has heard.

Easton George Woodhead, 19, stabbed Morgan Wayne "Mousey" Perry as he lay on his mattress with a group of homeless people living on the banks of Melbourne's Yarra River, the Melbourne Magistrates Court heard.

Prosecutor Michele Williams SC said Woodhead approached the group set up under a bridge in the CBD claiming one of them had stolen his motorbike.

Mr Perry responded by telling Woodhead to "piss off", Ms Williams said.

The court heard Woodhead then pulled a knife from his pocket and started waving it around, before standing on a milk crate and addressing the group, telling them he had recently discovered his father was a werewolf.

Ms Williams said Woodhead then jumped on Mr Perry as he lay on his mattress and started stabbing him in the early hours of January 4 this year.

Woodhead had recently completed his year 12 studies at Melbourne Grammar and his former classmates had noticed his heavy use of marijuana and erratic behaviour, the court heard on Monday.

Woodhead's lawyer Michael Tovey said there was no dispute that Woodhead stabbed and killed Mr Perry, but his state of mind at the time of the incident would be at issue.

Woodhead's committal hearing continues.