Eleanor Gray QC, for Ashworth Hospital, has described one event on the ward which, she suggests, shows evidence of Ian Brady's mental state.
Brady complained to medical staff about the behaviour of a fellow-patient while he was making a phone call. He claimed the other patient had been repeatedly slamming a locker door and making animal noises while he was attempting to use the phone.
When asked what kind of animal noises, Brady replied "pig noises".
The psychiatrist noted that at the time of the alleged incident, the other patient had been sitting quietly and reading a magazine.
Ms Gray asked Dr Grounds whether Brady was being untruthful "or frankly deluded? Was this a possible hallucination?"
Dr Grounds replied: "Maybe. It's a paranoid response".
More top news
After flooding and thunderstorms, a quieter night ahead
Boris Johnson announces funds for troubled country in a bid to stop an influx of illegal migrants and terrorists taking advantage of chaos.
The former US Presidential candidate says her "skin crawled" during her infamous second TV debate with Donald Trump in a new memoir.