Mr McFarlane's ex-wife, Alysha Marie Collins, her sister Carmen Louise Fraser and his girlfriend at the time of his death, Darlene Tracey Andrews, said Mr McFarlane told them months before his death he was worried over a debt he had over a drug deal gone wrong.
"He did say that if he didn't come up with some money, he might get his kneecaps taken out," Ms Fraser said.
The trouble was caused by him buying someone else cannabis, only for the person to do a "runner", she said.
The amount in question was about $2000, but he later told her he had sorted out the issue.
Under cross-examination from defence counsel, including Judith Ablett-Kerr QC representing Jacob Geary-Smart, Ms Fraser and her sister admitted being unsure of the dates when the conversations occurred and that Mr McFarlane was prone to telling tall stories.
Ms Ablett-Kerr contended the conversations happened "quite a while before" his death and if the debt "ever existed it had been resolved".
On Wednesday, the court was told in the Crown's opening that three of the four defendants started a self-described "skinhead" group, after Cummings arrived in Oamaru three weeks before the murder.
Boskell was not part of the "skinhead" group as reported in yesterday's Otago Daily Times.
Under questioning from defence counsel David More, representing Ryan Geary-Smart, Miss Andrews said she thought Mr McFarlane sold four $50 bags of cannabis a week before his death.
She believed he owed money to a number of different people, after earlier saying he was "shocking" with money.
Crown counsel Andrew McRae earlier read a statement by Mr McFarlane's mother, Kathleen Ann Rowe, who said her son, known by the nickname "Spook", was a "hard worker" and "good with kids"
She said her son was a drug-user and a social drinker.
"Justin has been using drugs for most of his life; he dabbled in everything."
Ms Collins said, despite being divorced, she got on well with Mr McFarlane.
He was a "great father" to their two children, whom he took every second weekend and occasionally during the week.
"His kids idolised him. He would take them fishing on his days off," she said.
He was a regular cannabis user, who smoked it every day after work and occasionally during lunch breaks when he was at work.
He was also an occasional user of other drugs, such as speed.
Miss Andrews said he was a "loving man" who talked about his children "all the time" and treated her children as if they were his own.
On Wednesday, Crown counsel Lisa Preston told the court the four murder defendants subjected Mr McFarlane to "a long brutal beating", during which he was hit with a fire poker, a golf club and a beer bottle.
The trial, before Justice David Gendall, is expected to hear evidence from about 130 witnesses, including police, pathologists, sports shoe company employees, scientists and a prison doctor.
