Two people were seen in a layby where the burnt-out car owned by a woman who vanished along with her three-year-old son was found, a court has heard.

At the High Court in Inverness, William MacDowell, of Penrith in Cumbria, denies killing his son Andrew MacRae and the child’s 36-year-old mother Renee MacRae in November 1976.

Martin Shand, who was studying at the Dundee College of Technology at the time of the mother and son’s disappearance, told the court on Tuesday that on the evening on November 12 1976 he was being driven home by a friend and another student when they travelled past the Dalmagarry layby on the A9 near Inverness, where the BMW car was discovered.

The 65-year-old said the layby “had a certain reputation for courting couples”, and that evening he was being driven alongside it between 7.30pm and 8pm.

The retired engineer told the court: “We passed the layby at a very low speed because the surface of the road being quite badly disturbed because of the roadworks. Probably at walking speed.”

Mr Shand said there were two vehicles in the layby. “The first was a pale-colour BMW. The second one was a Volvo,” he said.

The court has previously heard MacDowell was issued with a Volvo as his company car.

Mr Shand added he saw “two people with their backs to the main road”. He told the jury: “It’s guesswork, but I would say from the build it was two male persons.”

After they passed, advocate depute Alex Prentice KC was told, Mr Shand spoke with those in the car with him about their encounter and said they believed it was “some sort of social encounter”.

Mr Shand was later stopped by police at a roadside checkpoint as officers were hunting for information about the disappearance of Mrs MacRae and her son.

Murray Macara KC, defending, told the court that in his statement in 1976, Mr Shand told detectives that he “didn’t see anything unusual or untoward” on their journey from Dundee.

Mr Shand said at first he felt like what he had seen was not significant, and when he realised it might be, he did not contact the police because he was “prevented from doing so by my parents”.

Mr Macara also showed the jury archive documentary footage and photographs of mounds of earth by the side of the layby.

Dr Evlin Burn, 80, told the court she had been on her way to a booking at the Meallmore Lodge, and had seen a vehicle in a layby.

And Patricia Wilson, 82, told the court she saw a car pulled over at the side of the road near the lodge as she was driving with her late mother, and had to move out of the way of the vehicle.

Ms Wilson said she saw a person in the car, as well as a child, and there was a man stood in the angle of the driver’s-side door with one arm on the roof and the other on the door with his head down, speaking to the person inside.

Retired nurse Maureen Grant, 79, told the court she saw Mrs MacRae’s vehicle parked outside the hotel on the A9 as she made her way to Aviemore for dinner.

MacDowell, 80, faces three charges against him. He is charged with assaulting Mrs MacRae and Andrew at the Dalmagarry layby on the A9 trunk road south of Inverness, or elsewhere, by means unknown, and as a result murdering them.

He is also charged with disposing of their bodies and belongings by means unknown.

MacDowell denies all charges and has lodged a special defence of incrimination and alibi.

The trial, before Lord Armstrong, continues.