The High Court has quashed the conviction of a man jailed for life over the murder of 85-year-old Liselotte Watson in 2012.

Steven Fennell was charged after Ms Watson was found dead in her bed with head injuries from a blunt object on Macleay Island, off Brisbane, in November that year.

At the time, police thought the killing was consistent with a burglary.

It was Mr Fennell who alerted the police that there may be something wrong when he asked them to do a welfare check.

The pair had been friends for a couple of years and Mr Fennell had helped Mrs Watson with shopping and odd jobs, dropping in for a cup of tea most days.

But police eventually charged Mr Fennell with murder.

It was alleged Mr Fennell had been stealing from Mrs Watson to feed a gambling habit and his motive to kill her was fear he was about to be uncovered.

The crown case was entirely circumstantial.

Mr Fennell had been sentenced to life in jail for the killing in 2016.

Mr Fennell lost an appeal in which he argued the court should have considered the alternative that it was a botched burglary by someone else.

Court documents reveal it was common knowledge in the small island community that Ms Watson kept quantities of cash on her property.

His lawyers argued Mr Fennell was convicted "an obviously weak case" by a jury that had seen prejudicial transcripts showing he had been in prison before for other offences.

Today Mr Fennell was vindicated by the High Court.

The full bench heard argument in the case this morning in Canberra, and this afternoon delivered its decision allowing Mr Fennell's appeal, quashing his conviction, and entering an acquittal, effectively ending his life sentence.

The court's reasons will be delivered later.