Lily Ridgeway, 21, of Taree, launched a second bid for bail on Monday, this time before the NSW Supreme Court in Sydney.

Her solicitor, Aboriginal Legal Service Trial Advocate Elana Scoufis, claimed a combination of self-defence and strict bail conditions, including a relocation to central-west NSW, house arrest, mental health treatment and drug counselling, meant any risks Ms Ridgeway posed could be mitigated and she could be granted release ahead of a murder trial expected to be held in late 2021.

Ms Scoufis said the prosecution would ultimately "struggle" to disprove Ms Ridgeway's self-defence claim, with the 21-year-old telling police she saw something "shiny" in Mr Adams' hand that she thought was a knife before he grabbed her and she stabbed him once.

The fatal confrontation came after Mr Adams had been told to leave the house in Payton Street in the early hours of February 29 this year and then "returned saying terrible things", the court heard.

"He was saying things like: "come out you c---s" and things of that nature," Ms Scoufis said.

"He is certainly provocative in his behaviour.

"On the prosecution case [Ms Ridgeway] comes out of the house and tries to send him away verbally.

"She sees something in his hand - something she perceives to be a knife - he comes towards her and grabs her and she stabs him a single time. "It is a very fast interaction."

According to Ms Scoufis, Ms Ridgeway's version meant the prosecution would "struggle" to disprove that the 21-year-old did not believe her actions were necessary to defend herself and that it was not a reasonable response in the circumstances as she perceived them.

Ms Ridgeway was arrested at a motel at North Haven on March 2 this year, two days after the body of Mr Adams was found in the middle of the intersection of Watt and Payton streets at Raymond Terrace.

She was charged with murder and, despite a close run bid for bail in Newcastle Local Court in July, has remained behind bars ever since.

Neighbours in the tiny cul-de-sac have described being woken about 5.30am on February 29 to the sound of screaming.

A member of the public found Mr Adams' body lying on the road about 5.45am and called triple-zero.

In relation to the self-defence issue, Justice Richard Button said on Monday that the prosecution claimed that, after stabbing Mr Adams, Ms Ridgeway told a friend: "oh babe you should have felt that, it felt so good".

Ms Scoufis said "little reliance" could be placed on the evidence of that witness, who she said had attempted to distance herself from Mr Adams' death and had given a conflicting account to others at the scene.

Ultimately, Justice Button adjourned the bail application until Tuesday, seeking something more concrete in terms of mental health intervention and counselling before he considered granting Ms Ridgeway bail.

Thank you for valuing local journalism with your subscription. While you're with us, you can also receive updates straight to your inbox from the Port Macquarie News. To make sure you're up to date with all the news, sign up here.