A jury was told the North Ipswich Christmas party had been going well until Mr Toby told a joke that upset his daughter Kieran, Reid's partner.

She was persuaded to stay but when Mr Toby tried to stop Reid from leaving, he was stabbed twice in the chest with one blow piercing his heart.

Reid had pleaded not guilty to murder at the trial before Justice Peter Callaghan.

The jury was told Mr Toby was able to convince his daughter to stay after telling the joke, warning her that she should not be drink driving.

Soon afterwards the daughter heard the front gate opening and saw an intoxicated Reid near his ute.

When she tried to stop him leaving, the daughter said Reid struck her and moved toward Mr Toby who was closing the gate.

Crown prosecutor Matt LeGrand said Reid had lashed out with violence when his attempts to leave met resistance.

Defence barrister Jessica Horne said tensions were rising after Mr Toby and his son Ethan went outside to stop the daughter and Reid from leaving the first time.

When Reid struck the daughter while attempting to leave a second time, Mr Toby came at him with his "hands up ready to fight", Ms Horne said.

Reid was unable to retreat and under attack so he stabbed Mr Toby who kept coming for him, she said.

Reid became scared as Mr Toby pushed him against the ute, grabbed at his neck and tried to punch him, fearing that son Ethan may join in at any minute, the defence said.

Reid acted instinctively to defend himself and stabbed Mr Toby two more times, Ms Horne said.

Mr Toby's family and supporters gasped in court when Reid was found not guilty of murder on Tuesday afternoon.

He will be sentenced for manslaughter later this month.