The man was taken to hospital with critical injuries and died on Sunday afternoon.

Mr Deakin's rampage has now claimed two lives, after his grandmother died of her stab wounds.

Two days after the attack, Mr Deakin's grandfather remains in a critical condition in hospital.

"This is a very terrible ... unusual event for this area, for a place like Bega," Chief Inspector Susan Charman-Horton said on Saturday.

"He was unwell [when he was arrested] and needed to be taken to hospital to be looked at by an expert."

Police warned nearby residents to stay inside with doors and windows locked while police carried out the manhunt.

A woman who was a passenger in the car at the time with the 54-year-old man escaped without injury.

Mr Deakin crashed the car only 500 metres down the road before running into bushland.

About 8.20pm he was arrested and taken to South East Regional Hospital.

On Sunday Mr Deakin was charged with murder and two counts of wound with intent to murder.

He attended court in a hospital gown and had cuts and a bloodied forehead.

When the registrar asked the defence if a release application would be applied for, Deakin asked: “What is a release application?”

Deakin apologised for the interruption and later asked if his cousin would be available to defend him.

As proceedings were finalised, Deakin again apologised, saying: “I’m very sorry."

He was refused bail and will appear in court again on Monday.

His charges are expected to be upgraded following the death of the man.

With Bega District News and Esther Han.