A 66-year-old Australian man was charged with several offences on Monday over a fatal crash that killed five members of two Indian-origin families at an outdoor dining area of a pub here last month, according to a media report.

William Swale was arrested on Monday over the incident which claimed five lives and left others badly injured at the Royal Daylesford Hotel on November 5.

Vivek Bhatia (38), his son Vihan (11), Pratibha Sharma, 44, her nine-year-old daughter Anvi, and her husband Jatin Kumar, 30, were killed in the incident.

Bhatia's younger son, Abir, and wife Ruchi, were hospitalised but have since been released.

Swale, who has lived with type one diabetes for three decades, has been charged with five counts of culpable driving causing death, two counts of negligently causing serious injury and seven counts of reckless conduct endangering life, ABC News reported.

On Monday, Detective Sergeant Peter Romanis told the Melbourne Magistrates' Court Swale scanned his blood glucose monitoring device at 5:17 pm, about 40 minutes before the crash.

The officer said it produced a reading of 2.9 millimoles of glucose per litre of blood, a level considered to be below a safe threshold.

"The accused received and ignored a further eight mobile phone alerts via a blood glucose monitoring app prior to the collision occurring," Sergeant Romanis said.

Sergeant Romanis said Swale was captured on CCTV entering a wine bar at 5:20 pm and asking for a table, before returning to his vehicle.

He was seen driving his vehicle at 5:42 pm and 5:44 pm, and then at 6:07 pm when he "lost control of the BMW" as it travelled down Albert Street, over a kerb and into the diners who were seated at tables on the grass reserve.

Sergeant Romanis said Swale stayed in his vehicle and was observed as being "sweaty", "hot" and "clammy" by bystanders who rushed to help.

Swale's lawyer Martin Amad said his client would be pleading not guilty, arguing it was "fair and square a medical episode" that had occurred. He said prosecutors would not be able to prove the 66-year-old was aware his blood glucose levels were dangerously low.

"It's a lot of jail, or no jail," he said of his client's position.

The court heard Swale had previously received more than 30 penalty notices for driving infringements, mostly for excessive speed but only had one prior conviction.

During cross-examination, Amad questioned Sergeant Romanis, asking him whether Swale had managed his medical condition well since his diagnosis in 1994. "Yes," the officer replied.

Amad said there might be a number of reasons why his client did not heed the blood glucose warnings, including that he was in the midst of a medical episode. "Clearly, he was," Sergeant Romanis said.

Sergeant Romanis said Swale made a "no comment" interview when he was arrested.

He said medical and mobile phone evidence would play an important role in the prosecution case.

"We've made approaches to the company responsible for the app. We're discussing with them at the moment about the provision of information for the case," he said. Swale was remanded in custody until Friday when Magistrate Brett Sonnet will decide on whether to release him on bail.

The criminal case against Swale will continue into next year when a contested committal hearing will be held to determine if there is sufficient evidence for him to stand trial in the County or Supreme Court, the report said.