THE father of Caroline Byrne was overheard instructing Gordon Wood to say his daughter had been killed in a car accident, a court has heard.

Wood, 45, has pleaded not guilty to murdering his girlfriend, who fell to her death at The Gap, at Watsons Bay, on June 7, 1995.

Wood's younger sister, Michele, yesterday told the jury that after being called by her brother, she and her mother, Brenda, had arrived at The Gap before dawn on the day Ms Byrne's body was discovered at the base of the cliff.

Ms Wood said they had later accompanied Wood to the Rose Bay police station, where he had found a referral to a psychiatrist in Ms Byrne's handbag. She said she could not recall how her brother came to have the handbag.

Ms Wood said that as she, her brother and mother later drove to the morgue in Glebe, her brother had received a call on his mobile phone.

She said yesterday that she heard Wood say, "Hi, Tony," when he answered the call.

He also said: "OK, then we'll say it was a car accident."

When her brother hung up, she recalled saying to him, "What do you mean 'car accident'?" and that she had pointed out that the car Caroline was driving wasn't even damaged.

Her mother had said, "Why do you have to say something like that?" Wood had replied that Caroline's father Tony had told him he didn't want it to be known that his daughter had committed suicide. "That's what Tony wants us to say," Ms Wood recalled her brother saying.

Crown prosecutor Ken McKay, who was conducting the case due to the illness of Mark Tedeschi, QC, suggested to Ms Wood that she was mistaken in her belief that it was Tony Byrne who was on the phone to Wood.

"I'm quite definite it was Tony on the phone," Ms Wood told the court. She said Mr Byrne had called Wood at least five or six times that morning.

Mr Byrne has previously given evidence that he did not call Wood on the morning his daughter's body was discovered. He also denied ever suggesting to Wood that he should lie about the manner of Caroline's death.