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
Rain will spread southeastwards through N. Ireland, Wales and England overnight. Northern parts of Britain will remain mostly dry.
Two members of the public were injured along with two police officers who were in the unmarked vehicle.
One of the attackers who murdered a priest in a French church during morning mass in Normandy has been named by prosecutors.