Security vision caught three deaf, intellectually disabled people discussing a plot to murder one of their housemates minutes before he was thrown off a balcony in Melbourne's east, a court has heard.

Georgia Fields, Jake Fairest and Warwick Toohey are accused of murdering Robert Wright who suffered a catastrophic head injury when he fell from his second floor apartment balcony on January 15, 2015.

The three friends are facing a special hearing in the Victorian Supreme Court after being found unfit to stand trial due to their intellectual disabilities.

The hearing will determine if the trio committed the crime.

Fields and Fairest have pleaded not guilty while Toohey has pleaded not guilty on the grounds of mental impairment.

Prosecutor Christopher Dane QC told the court the trio was captured on CCTV in the foyer and lift of the apartment building discussing in sign language a plan to murder Mr Wright, shortly before he was killed.

"Ms Fields asked Mr Fairest 'you want dead or alive and how die?', Mr Fairest ... signs 'can strangle neck area, what do you think?'" he told the court.

"Mr Toohey signs to Mr Fairest 'strangle risky' and Ms Fields signs 'fall good, fall good'."

Accused's relationship with victim had deteriorated, court hears

It is alleged Fairest and Toohey confronted Mr Wright in the apartment he shared with Toohey before the men lifted him over the balcony handrail as Fields watched on.

A neighbour told police he was standing on his balcony below when he saw Mr Wright hanging from the rail holding onto someone's hands before they let go and he fell 12 metres to the ground, the court heard.

When police arrived, the three were found inside the apartment. They each told detectives different accounts of what had happened.

The court heard Mr Wright and Toohey's relationship had deteriorated since they began living together, with the victim having accused his housemate of stealing a tablet computer and phone from his bedroom a year before he was killed.

Mr Dane told the court Fields admitted to police that the three of them had talked about how to kill Mr Wright before Fairest and Toohey pushed him over the balcony.

"They made a plan and they did it," he said.

Lawyers for Fairest and Fields told the court neither of their clients were involved in making a plan and had not participated in the alleged murder.

Toohey's lawyer told the court he would not dispute most of what the prosecutors had alleged but instead would challenge the assertion that Toohey had the mental capacity to be held legally liable for the crime.

The special hearing continues.