Melissa Beowulf had just bought her dream house.

"I found this little place and I can't believe how perfect it was," she told a friend, unaware police were bugging her phone.

"It's seven-and-a-half acres with a house that was only finished in 2014. Little two-bedroom place.

"It's right across from a beach … I'm going to have a little B&B there."

It was February 2016 and the acclaimed painter had moved from Canberra to Cuttagee on the NSW South Coast after a rollercoaster year.

Twelve months earlier she had been broke, caring for a dying husband, and living in a modest, messy home with several adults.

Despite her recognition as an Archibald Prize finalist, with works in the permanent collection of the National Portrait Gallery, the money had never been rolling in.

Melissa Beowulf purchased a house in Cuttagee in early 2016. ( Facebook )

So when her asset-rich mother-in-law Katherine Panin was found dead after an apparent fall down the family home's backyard steps, the multi-million-dollar inheritance was akin to manna from heaven.

But no such extravagance was spent on Mrs Panin.

The Beowulfs chose the cheapest option for her body: cremation with no funeral. And the family would later be recorded joking about throwing Mrs Panin's ashes in the bin.

Yet, in the months after, tens of thousands of dollars were spent on cars, the debt Melissa had been swimming in was paid down and she moved quickly to scoop up the Cuttagee property when Mrs Panin's estate paid out.

The lifestyle change was abrupt — so abrupt it added to growing police suspicions: Maybe Katherine Panin's fall was not an accident.

Red blood on a red rug

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 1 minute 45 seconds 1 m 45 s Ambulance call after Melissa Beowulf found Katherine Panin's body

Prosecutors could not say exactly what happened before an ambulance was called to the Beowulf family home on October 12, 2015 — even after Melissa Beowulf and her two eldest sons, Thorsten and Bjorn, were charged with murder.

When Ms Beowulf made a distressed call to triple-0 to report the death, she was hesitant to administer CPR, saying Mrs Panin was definitely dead.

Jurors would later be told the scene paramedics were met with was "odd".

Mrs Panin's body showed no obvious cause of death. She had a cut on her right eyebrow that bled, an abrasion on her cheek, and some bruises. None were anywhere near serious enough to kill.

Her foot was covered in netting, suggesting she may have tripped — but the thong she was wearing at the time was not caught up in it.

The court would hear that an uncontrolled fall backwards would usually produce injuries such as scrapes on hands and knees or skull fractures — but none of those were present.

A hallway rug allegedly disappeared from the home shortly after Mrs Panin's death. It was later found with her blood on it. ( Supplied )

Prosecutors told the court the scene was inconsistent with a fall and may have been staged but, tellingly, they also offered another scenario suggesting Mrs Panin may have been pushed down the stairs.

Either way, prosecutors said, a red hallway rug had disappeared from the house by the time another family member arrived home.

When it was recovered by police months later, attempts had been made to have it dry cleaned. Still, forensic examiners found spots of blood and Mrs Panin's DNA — though it was not exactly solid proof.

As the defence put forward, there were a thousand ways the blood could have got there, and nobody could say when it ended up on the carpet.

Mrs Panin was found sprawled on the home's backyard steps in 2015. ( Supplied )

The accused trio put the rug's disappearance down to Thorsten Beowulf having "chundered" on it, after seeing his grandmother's body.

But by the time police obtained the rug, they were already in the middle of investigating the family's financial arrangements — in the wake of what they were now treating as a murder.

'Virtually penniless'

"Unconventional" was a word frequently used to describe the Beowulf family during the trial — not least because Melissa's husband Thorhammer Beowulf, born Nicholas Shliapnikoff, had both a wife and a de facto partner, both of whom lived under the same roof.

Both Thorhammer and Melissa embraced their creative sides, Thor as a Bonsai artist, and Melissa as an accomplished portraitist.

Katherine Panin referred to her room at the Beowulfs' home as a "coffin". ( Supplied )

Over the years she would paint NSW Government Minister Pru Goward, comedian Adam Spencer, and fellow painter Ken Done. The latter work would see her become a finalist in the prestigious Archibald Prize.

But while some of her works would wind up in the National Portrait Gallery's permanent collection, the court heard she did not rake in much income.

When Katherine Panin's husband George died in the late 1990s, Thorhammer inherited a substantial investment property portfolio.

There began a pattern, outlined by prosecutors, where the family would sell assets off, live off the proceeds until the money ran out, and then sell again.

Mrs Panin was set to inherit the multi-million dollar proceeds of a property in inner Sydney. ( Supplied: Beowulf Galleries )

But by the time Thorhammer died of pancreatic cancer in 2015, the court heard funds were dwindling and there was only one property left to sell — a home in Woolahra in Sydney's eastern suburbs, where Mrs Panin had lived for years.

When the Woolahra property went on the market, Mrs Panin moved into the family's cramped Canberra home — she would refer to her room there as a coffin.

Mrs Panin and Melissa had never got on but once they lived together, it was alleged tensions overspilled.

Mr Beowulf's de facto partner reported one incident where Ms Beowulf approached Mrs Panin in the home's kitchen, waving her arms and bellowing "c***face" at the elderly woman.

Mrs Panin made a report to police the next day, saying she was scared of her daughter-in-law, and wanted it to be clear who was responsible if anything happened to her.

Wanting to secure her financial independence, Mrs Panin altered Ms Beowulf's power of attorney over her affairs so that it could only be exercised if a doctor deemed her incapable of managing them herself.

Prosecutors said the timing of the change would effectively freeze Ms Beowulf out of the Woolahra sale — and its multi-million-dollar proceeds would instead solely be controlled by Mrs Panin.

When Ms Beowulf learned of the change, she was furious.

By October 12, 2015, Mrs Panin had decided to change her will.

Instead of leaving everything to Ms Beowulf, her assets would be split between her five grandsons, Ms Beowulf, and Thorhammer's other partner.

That morning she made an appointment to see her solicitor.

She did not make it.

A year in jail

While Mrs Panin's death was initially ruled an accident, police quietly began investigating one month later, after noticing discrepancies in the timeline Ms Beowulf had provided.

But the spectre of prosecution hovered above Ms Beowulf and her two eldest sons for more than a year before anybody was charged.

When Ms Beowulf was finally brought to court in August 2017, she had a bouncy dark brown ponytail, and stood with an air of confidence beside her son Bjorn, as they were charged with killing Mrs Panin.

Thorsten Beowulf had to be extradited from Sydney, and appeared in court the next day.

Thorsten, Melissa and Bjorn Beowulf were released on bail in October 2018. ( ABC News )

The three were remanded in custody as questions swirled over whether Ms Beowulf's works would be removed from display at the National Portrait Gallery.

Just days later prosecutors seized the family's assets, and the Beowulfs lost their ability to pay for a top-drawer lawyer.

They were committed for trial by the end of 2017, but it was not until October 2018 that a new legal aid team finally sought bail.

By then Melissa, Thorsten and Bjorn Beowulf had been in jail for 14 months without being found guilty of a crime. Any of their earlier confidence was gone.

After being released to field questions from the media, the trio were left waiting for a lift in their prison clothes in the court carpark.

Sketching from the dock

Usually courtroom artists are positioned in the public gallery, keeping keen observance of the accused, lawyers and judge — but Ms Beowulf had a unique perspective for her trial.

By the time the eight-week trial was nearing its end, she had taken to drawing in the courtroom as her sons took notes beside her.

Melissa Beowulf near the end of her trial. ( ABC News: Jordan Hayne )

Sometimes Ms Beowulf would tear up, often at the mention of her late husband's death. Sometimes she would shake her head in disbelief at the evidence being put against her.

But when phone taps of herself describing her dog running on the beach were played, a broad grin emerged on her face.

Prosecutors told the jury suspicions were first aroused about Ms Beowulf and her sons over inconsistencies about when Mrs Panin was last seen alive.

On the day of the death she told police she had last seen Mrs Panin at 10:00am. That was wrong and a month later she changed that to 2:00pm.

Bjorn Beowulf searched for a blacklight torch the day after the death. ( ABC News: Jordan Hayne )

To the defence it was a mistake made by a distressed and emotional person. To the prosecution it was the first in a list of suspicious circumstances:

The rug had disappeared from the home and was later found with blood

The rug had disappeared from the home and was later found with blood Mrs Panin had moved to change her will that morning

Mrs Panin had moved to change her will that morning The family was running low on funds

The family was running low on funds Mrs Panin's body did not have injuries to be expected in a fall

Mrs Panin's body did not have injuries to be expected in a fall Computer activity in the house stopped at the time Ms Panin was talking on the phone about changing her will

Computer activity in the house stopped at the time Ms Panin was talking on the phone about changing her will Ms Beowulf was prone to fighting with Mrs Panin over family money

Ms Beowulf was prone to fighting with Mrs Panin over family money Mrs Panin had told friends and police she was scared of being killed by Ms Beowulf

Mrs Panin had told friends and police she was scared of being killed by Ms Beowulf Bjorn Beowulf made internet searches for a blacklight torch the day after the death

But the defence had answers to nearly everything. The boys stood to benefit over the changed will, blacklights could be used in Bjorn's field of construction, Mrs Panin had a paranoid personality and likely had undiagnosed dementia.

'Someone must have been telling lies'

Before he rested his case, defence lawyer Ken Archer drew from an unconventional source: Franz Kafka.

"Someone must have been telling lies about Josef K., he knew he had done nothing wrong but, one morning he was arrested," he said, quoting the dystopian novel The Trial.

Mr Archer explained the book's protagonist was prosecuted for a crime without being aware of the nature of the charges.

To the 13 jurors who had sat through days of closing argument, the link would have been clear.

As far as murder trials go, they had heard a very circumstantial case.

Thorsten Beowulf outside the ACT Supreme Court. ( ABC News: Jordan Hayne )

Prosecutors were not able to say how Mrs Panin died, where in the house she died or who killed her.

Instead they reasoned an altercation would attract the attention of everyone in the home, and that Melissa, Bjorn and Thorsten Beowulf had made an agreement that Mrs Panin should be killed.

But defence lawyers said the court had heard no evidence to support that notion — a crucial element of the joint commission offence they had been charged with.

Family was bugged for months

A rough timeline of the day was put forward: Mrs Panin called a friend and discussed changing her will about 12:30pm — at the same time all computer activity in the house ceased.

Prosecutors said Ms Beowulf had a tendency to become enraged at Mrs Panin when she spoke of changing family money arrangements — and that she or one of the boys overheard Mrs Panin's phone call.

From there it was alleged a fight broke out, Mrs Panin was hit, causing the minor injuries to her face, and she — somehow — died.

The three then staged the accident scene and went out to eat lunch and hide the bloody red rug in a storage unit.

But the defence had mundane explanations for the circumstantial evidence.

Computer use in the house ceased because the accused had started to help pack boxes ahead of Mrs Panin moving into a retirement village.

They had made a trip to the storage locker for a similar reason, the defence said.

But, perhaps most compellingly, prosecutors tendered hours of secret recordings made of the accused trio in which, the defence said, the three "continually protest their innocence".

Thorsten Beowulf, after an interview with police, can be heard on tape attacking the allegations as "unfounded".

Recordings have the accused describing the situation as "bullshit" in each other's company, and saying "they've got no evidence because there isn't any".

At one point Ms Beowulf was recorded voicing her regret that she had not killed Mrs Panin:

"There's a part of me that would have enjoyed it," she said.

"She did us a favour by taking herself out," one of the boys said.

In court, the defence believed the evidence was compelling.

"They're not talking to you, they're talking to themselves," Mr Archer told the jury.

"There is no reason for them to protest their innocence to each other."

In the end the jury agreed: Not guilty.

'These proceedings should never have been brought'

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 1 minute 2 seconds 1 m 2 s Defence lawyer Ken Archer speaks outside court

After eight weeks of evidence and argument, the jury took just a few hours to make up its mind.

An experienced barrister, Ken Archer, said he had never spoken at the conclusion of a case before.

But he broke his habit to slam the Director of Public Prosecutions (DPP) for ever charging Melissa, Bjorn and Thorsten Beowulf.

"In my view the criminal justice system hasn't worked very well in this case," he said.

"The proceedings should never have been brought.

"It is our intention to take it up with the Attorney-General as to why these people were charged, why they were kept in custody and why the DPP persisted with a charge that was clearly never going to be proved."

It was put to the jury the prosecution's case had a fatal flaw: unless they could rule out the chance that an elderly woman slipped, tripped or fell down the steps, the three accused must be acquitted.

And even before the charges were laid, covert recordings revealed Ms Beowulf's incredulity.