Dwayne Johnstone, a 43-year-old Wiradjuri man, was handcuffed and shackled when he elbowed an officer and ran off outside Lismore Base Hospital in northern NSW on March 15, 2019.

State Coroner Teresa O'Sullivan will hear arguments from lawyers on Wednesday over whether the officer who shot Mr Johnstone committed an indictable offence and should be referred to the Director of Public Prosecutions.

She adjourned the inquest for the day shortly after counsel assisting the coroner, Peggy Dwyer, outlined the evidence on Tuesday.

If the coroner decides to refer the officer to prosecutors, she may suspend the inquest, which began in Ballina on Tuesday. If the inquest proceeds, the coroner will consider whether discharging the firearm was appropriate.

The officer who shot Mr Johnstone was experienced and was not armed with a Taser, baton or other less lethal weapon at the time, Dr Dwyer told the court.

Multiple witnesses have said they heard the officer yell at Mr Johnstone to stop and saw him fire a warning shot before his third shot struck Mr Johnstone in his back.

Witnesses have also said he was running quickly despite being shackled, and did not stop even after being yelled at and hearing the warning shot.

CCTV footage also depicts the shooting, albeit from a distance, Dr Dwyer said.

Mr Johnstone had been taken into custody earlier on March 15 after being denied bail for assault charges.

He suffered from epilepsy and appeared to have a seizure in the cells at Lismore Local Court in the afternoon.

Two officers accompanied him from the cells to hospital, where he was taken by ambulance at around 3.30pm.

The officers' identities have been suppressed by the court.

Mr Johnstone received treatment, including being administered medications, and was then released from hospital. At 7.30pm, the two officers accompanied him to a prison van parked on a nearby street.

As they neared the rear of the van, Mr Johnstone elbowed the officer who held him by his jeans and ran across the road. That officer, had been on the job for about two months, initially ran after Mr Johnstone but the more senior officer shouted at him to get out of the way.

Mr Johnstone died from the single bullet wound, despite receiving urgent and apparently excellent medical care.

The court heard Mr Johnstone had made two previous escape attempts, in NSW and Victoria, but the two officers accompanying him have said they were not aware of that history.

Mr Johnstone had disclosed childhood sexual abuse at school and in state care to his parents and was participating in a civil claim against a boys' home at the time of his death, Dr Dwyer said.

"There is little doubt that those traumas impacted deeply upon Dwayne in his adult life," she said.

He was a father who was much loved by his parents and siblings, and was funny and warm, she said.

Australian Associated Press