A NSW inquiry into gay hate crimes is on Friday examining the death of Wendy Waine, who was fatally shot in her Darlinghurst apartment in April 1985.
The inquiry is probing the cold case after the coroner found Ms Waine was killed by an unknown person and Strike Force Parrabell, set up to investigate potential gay-hate deaths, found insufficient information to establish a bias crime.
Ms Waine's naked body was found next to her bed, with multiple gunshot wounds and bruising to the head consistent with blunt-force trauma, the inquiry was told.
There was a realistic possibility the performer, a well-known Kings Cross drag queen, was the victim of an LGBTQI-targeted homicide, counsel assisting the inquiry Kathleen Heath said in a submission.
"However there are other possible reasons why Ms Waine was murdered that are unrelated to LGBTIQ hate," she said.
The killing had the hallmarks of a professional hit, the inquiry was told, due to the lack of ballistic evidence at the scene, suggesting bullets were removed.
There was also a "muzzle abrasion" consistent with the use of an automatic pistol.
Another potential motive for the killing was as retaliation for Ms Waine "flushing" heroin being packaged for sale in the flat by someone else, Ms Heath said.
An anonymous witness claimed the murder was set up by notorious underworld figure Neddy Smith because Ms Waine "knew too much".
Someone Ms Waine was in a relationship with could also have been responsible, with the inquiry told several witnesses spoke of her connection to an officer attached to Darlinghurst Police Station.
"It was no particular secret at the time of Ms Waine's murder that there were rumours circulating that she had been in a relationship with a police officer," Ms Heath said.
Alternatively, a security guard from MSS Security, potentially in a relationship with Ms Waine, could have been responsible, with a neighbour seeing a security guard entering the building before the killing.
Ms Waine was last seen with a tattooed young man in a laneway where she would solicit sex work, Ms Heath told the inquiry.
"Her work as a street-based sex worker exposed her to significant risks of violence generally," she said in her submission.
Also in the mix was a call made to a Sydney radio station claiming responsibility for the killing on behalf of the "coven of mercy of fate", but Ms Heath labelled that claim as dubious.
The case involved deficiencies in the police investigation that left loose ends and grounds for serious concern about why lines of inquiry were not pursued, she said.
"Regrettably today we are no closer to knowing the identity of Ms Waine's killer or potentially killers," Ms Heath said, adding a "multitude of theories" remained.
The inquiry continues.