Peter Keogh asked his girlfriend to pick up some clothes when Maria James was murdered because he thought the police were after him and was "too frightened" to go home.
Ms James, a 38-year-old mother-of-two, was stabbed 68 times around midday in June 1980 at her Thornbury home and bookstore.
A new inquest into her death has identified Keogh, who died in 2001, as one of six main suspects.
In evidence on Thursday the sister of his former girlfriend, Judy McNulty, said Keogh asked his partner to get him clothes from his Northcote flat, at the time of Ms James' murder.
"He was too frightened to go home," Dorothy Haynes, Ms McNulty's sister, told the Victorian Coroners Court.
"The story was he wanted the flat checked out and he wanted some clothes, because he couldn't go home.
"Peter Keogh said whenever anything happened, the police came straight after him. The whole situation ... to ask to check out if the police were at his flat looking for him - it's pretty unusual, a pretty strange thing to do."
Ms Haynes said Ms McNulty, who was in a relationship with Keogh from 1979 to 1981 and died in 1994, was nervous and apprehensive when they both went her boyfriend's flat.
Ms Haynes recalls they made this trip in between 1pm and 3pm and believes it happened on the day Ms James was murdered.
And while Ms McNulty originally provided an alibi for Keogh, Ms Haynes said she found this confusing as her sister always thought her boyfriend at the time had killed Ms James.
"It didn't make sense, because she felt that he did it," she said.
Ms Haynes rang police in 1982 and told them she believed Keogh had killed Maria James.
She told them he was a former butcher who liked "knives and women".
Ms Haynes on Thursday also said Keogh had attacked her sister with a knife and had raped another sister of hers.
But counsel representing the James family, Adrian Anderson, said there remains no rock solid proof that Keogh had ever met Ms James or knew about her bookshop.
"From your knowledge of Peter Keogh and his relationship with your sister, do you have information that goes to that question?" Mr Anderson asked Ms Haynes.
"No, the only thing I can say is that my sister was convinced it was Peter Keogh," she responded.
Keogh stabbed his ex-girlfriend, Vicki Cleary, to death outside the kindergarten she worked at in 1987.
Other men suspected of killing Ms James include Father Anthony Bongiorno and Father Thomas O'Keeffe, both accused of abusing one of her sons.
The only living suspect is Peco Macevski, a former real estate agent who was having an affair with Ms James at the time of her death.
He was scheduled to give evidence last week before being taken to hospital with severe low blood pressure.
The inquest continues.
Australian Associated Press
