Wagga Local Court heard sentencing submissions in regards to the case yesterday, but magistrate Michael Antrum said he was of the view an Intensive Corrections Order (ICO) may be an appropriate way to deal with the matter.

With no ICO report ordered by previous magistrates, Mr Antrum apologised to Scutti and his solicitor saying the matter would again be adjourned for six weeks to allow for a report to be completed.

"I appreciate the delays in bringing this matter to finality given there must be a degree of anxiety," Mr Antrum said.

"I am aware the defendant does have some psychological issues which, if this was resolved, would help in his treatment.

"In balancing the circumstances and the need for general deterrence, (the charge of malicious damage property by fire exceeding $15,000) at first look calls for a custodial penalty, but there is one thing in my view which takes it one rung down (to an ICO), that is the accumulation of all the circumstances including the terrible news he received that day."

The court heard that on the day the 66-year-old burned down the Family Hotel he had been told his wife Sharon had terminal cancer.

She has since died.

Scutti's solicitor told the court his client had struggled with his level of remorse, but a recent breakthrough has seen him appreciate the severity of his actions and show contrition.

He said despite the hotel being a thorn in Scutti's side since 2004 when the pub's pokie machines were sold from underneath him, the fire was a hair-brained scheme only dreamt up that evening on impulse.

The police prosecution urged Mr Antrum through written submissions to consider a prison sentence given the high degree of criminality of the fire.

They argued the loss of the building was substantial for the community and the offence was committed with no regard for public safety.

Scutti was also charged with dishonestly making a written statement to QBE Insurance following the fire with the intention of making a claim.

The matter will return to court in July.