Underworld boss Carl Williams was offered inducements of an "extraordinary ilk" to make a statement implicating former detective Paul Dale and a convicted killer in the murders of a police informer and his wife, an inquest has heard.
Mr Dale and jailed hitman Rodney Collins on Thursday took to the witness box at the inquest into the murders of Terence and Christine Hodson – but only to tell State Coroner Ian Gray they do not want to give evidence.
The Hodsons were both shot in the back of the head at their Kew home on the weekend of May 15 and 16, 2004. In 2009 Mr Dale was charged with the murder of Mr Hodson, while Collins was charged with both murders.
But the charges against both were dropped following the 2010 bashing murder of Williams while he was in prison.
Judge Gray can order Mr Dale and Collins to give evidence and will make a ruling next week.
The Coroners Court on Thursday heard Williams was let out of jail to spend Christmas 2008 with his father and police officers, and that the convicted killer was offered inducements in return for a statement against Mr Dale and Collins.
Mr Dale's barrister, Geoffrey Steward, said Williams wanted his father's $750,000 tax bill forgiven, his daughter's school fees paid, his own jail sentence reduced and to be eligible to collect a $1 million reward offered over the Hodson murders.
Mr Steward said Victoria Police had maintained an "obsessional pursuit" of Mr Dale and that the case against him was based on the statement of the "serial killing, disreputable, drug trafficking and despicable character that Carl Williams was".
He said the inducements offered to Williams were of an "extraordinary ilk" and highlighted the "transparent veneer" police had in believing Mr Dale was responsible, despite "exhaustive investigations" against him.
"It is almost inconceivable that a man could be charged with murder on the say-so of Carl Williams with those incentives," Mr Steward said.
Mr Dale and Collins, who is in jail over an unrelated 1987 murder of a couple in their home, deny any involvement in the Hodson murders.
Catherine Boston, representing Collins, said a certificate provided by the State Coroner would not truly protect her client, as police could still pursue another line of inquiry based on any evidence Collins gave.
But Rachel Doyle SC, representing Victoria Police, said the need to ensure the administration of justice could "trump" the wishes of both men, and the fact their evidence would help Judge Gray perform a thorough investigation, might provide the Hodsons' family with answers and promote public confidence in the justice system.
Ms Doyle said Mr Dale and Collins had previously "cherry-picked" by speaking with police when it suited them, and that the former detective had written a book about his experiences.
She also said much of what Williams told police had been objectively corroborated. "In other words, it checked out," she said.
A lawyer representing the Hodsons' daughters, Mandy Hodson and Nicola Komiazyk, said the family wanted Mr Dale and Collins to give evidence.
The Hodsons' daughters and Mr Dale sat in the same row in court, although some seats apart, while they listened to the lawyers' submissions.
But Collins, dressed in a light-grey suit and with his white hair and moustache cut neatly, asked to be excused after he left the witness box and was escorted back into custody by protective services officers.
The inquest will resume on Tuesday.