The record 43-year jail maximum sentence sentence given to the teenaged relative of serial killer Ivan Milat for murdering his friend with an axe was "stern" but not "manifestly excessive" the state's highest appeal court has found.

Matthew Milat was a few weeks shy of his 18th birthday on November 20, 2010, when he lured his mate, David Auchterlonie, 17, into the Belanglo State Forest - the scene of his great uncle Ivan's infamous exploits in the 1980s and '90s.

As another friend, Cohen Klein, sat recording the events on a mobile phone, Milat tortured and tormented his friend with a double-sided axe before killing him with a savage blow to the back of the head.

He later bragged about the murder to his mates, telling them "you know the last name Milat ... I did what they do".

Milat and Klein - both now 21 - pleaded guilty to murder and on June 8, 2012 acting Justice Jane Mathews sentenced Milat to a maximum of 43 years' jail with a non-parole period of 30 years.

It was the highest sentence given to a juvenile in NSW, with the exception of two that were subsequently reduced on appeal.

Milat and his legal team sought to have his sentence reduced in a similar fashion, arguing that it was manifestly excessive.

They argued in the NSW Court of Criminal Appeal that Justice Mathews had erred in a number of respects. They disputed the finding that Milat tortured David Auchterlonie before his death, that the murder had been planned and premeditated, and that for these and other reasons the crime fell into the worst category of murder.

Milat's defence also argued that the young man was not a substantial risk and a serious danger to the community, and that he should have been given a reduction in sentence for his early guilty plea – a discount which Justice Mathews denied.

However, on Friday, the three-judge appeal panel rejected each of these grounds.

They found that the audio recording of the murder taken by Klein suggested that Milat had been seeking an "adrenaline rush".

"A sentence of 43 years and a non-parole period of 30 years is undoubtedly a very stern imposition upon a young man," Justice Robert Allan Hulme said in his reasons for judgment.

"It is well beyond what has been imposed in almost all other cases of young offenders convicted of murder to which the court was taken. But it was an adult crime, the gravity of which was difficult to overstate. If Milat was only a few weeks older it would have attracted a mandatory life sentence."

However, the judges accepted the argument by Klein's legal team that his sentence should be reduced because insufficient weight had been given to his early guilty plea.

Acting Justice Matthew's finding that the utility of Klein's plea was reduced by the fact that he disputed some of the facts on sentence and that this necessitated playing traumatic portions of his audio recording, was overturned.

His sentence of 32 years maximum and 22 years minimum was reduced to 27 years and 20 years respectively.