Caroline Nilsson acquitted of murdering her mother-in-law but yet to hear if manslaughter charge will be pursued.

After being acquitted of murdering her mother-in-law, a woman is back out on bail – but is not allowed to live with her husband.

Caroline Nilsson leaves the Supreme Court after being acquitted of murder, flanked by her lawyer Heath Barklay QC and husband Mark Nilsson. Picture Simon Cross

Alleged mother-in-law killer Caroline Nilsson has had her bail conditions relaxed – but cannot live with her husband – while prosecutors are yet to reveal if they will pursue a manslaughter charge against her by Christmas, a court has heard.

Ms Nilsson, 30, was on Tuesday found not guilty by a Supreme Court jury of the September 2016 murder of her mother-in-law, Myrna Nilsson, at the Valley View home they shared.

But, the jury was unable to reach a verdict on the lesser charge of manslaughter.

Myrna Nilsson was found bludgeoned to death in the laundry room at the back of the house after being attacked just 47 seconds after she stopped her car upon returning home.

Caroline Dela Rose Nilsson returned to court on Wednesday to seek the removal of her home detention bail conditions, and to live with her husband Mark Nilsson ahead of a possible future trial.

Emily Telfer QC, prosecuting, told the court she was not opposed to the removal of home detention bail conditions such as electronic monitoring but said Ms Nilsson should remain living with her current two guarantors.

“For a variety of reasons, living with Mr Nilsson and Mr Nilsson being a guarantor would be opposed,” she said.

She also asked the court ban her from attending Ingle Farm Shopping Centre because of its proximity to the residences of a number witnesses and that she not travel to Mt Gambier without ample notification to police.

Ms Telfer said Myrna Nilsson’s sister lived in Mt Gambier, and there was “distress” within the family about the allegations surrounding her death.

“(Manslaughter) is still a very serious offence and some structured bail conditions and an assurance that the environment she is living in is appropriate is called for,” she said.

Ms Telfer said prosecutors were seeking the case return to court in six weeks to allow time to consider whether the manslaughter charge would proceed.

James Caldicott, for Ms Nilsson, said conditions preventing Ms Nilsson from visiting the shopping centre and travelling to Mt Gambier were “overly onerous”.

He said prosecutors would face “significant hurdles” in pursuing a manslaughter charge.

Justice Kevin Nicholson removed the home detention bail condition, but declined to allow Ms Nilsson to live with her husband.

He further ordered she notify Mt Gambier police of any travel plans 72 hours before any planned arrival.

Justice Nicholson listed the matter for mid-December, when prosecutors are expected to provide the court with a decision on whether the manslaughter charge will proceed.

Ms Nilsson cannot be retried for murder. It was the second time she had stood trial for the alleged murder – late last year a jury was unable to reach a verdict, leading to the retrial.

Myrna Nilsson was found bludgeoned to death near the back door of the house.

Caroline Nilsson’s three children were in the house at the time. She said she was tied up by two men responsible for the crime, but managed to crawl into the driveway and raise the alarm.

Myrna Nilsson was brutally killed in her family’s Valley View home.

Caroline Dela Rose Nilsson returns to the home where her mother-in-law was killed during her original trial in 2020. Picture: NCA NewsWire / Naomi Jellicoe

But she was arrested and charged with murder more than a year after the killing. The jury heard that data from Myrna Nilsson’s Apple Watch showed a flurry of activity shortly after she entered the home.

Mark Nilsson, Myrna’s son and Ms Nilsson’s husband, had been working as a security guard at the time of the attack and was not home.