A judge has warned a Muslim woman after she refused to stand when the judicial officer entered the courtroom because 'she won't stand for anyone except Allah'.

Moutia Elzahed - the second wife of Hamdi Alqudsi who was convicted for recruiting for Islamic State in Syria - once again appeared at the Sydney District Court on Wednesday for a civil matter.

Ms Elzahed, Alqudsi and her two teenage sons are suing the Commonwealth of Australia and New South Wales for assault and battery during the 2014 counter-terrorism raids.

After the regular morning tea break, Judge Audrey Balla told lawyer Clive Evatt she had noticed Ms Elzahed 'doesn't stand' for the judge when she entered the court room.

Moutia Elzahed (pictured) appeared at Sydney District Court on Wednesday for a civil matter

Judge Audrey Balla (left) told lawyer Clive Evatt she noticed Ms Elzahed 'doesn't stand' for the judge when she entered the court room, in which he responded it was for 'religious reasons'

The woman is the second wife of convicted Islamic State recruiter Hamdi Alqudsi (pictured)

'Is there a reason?' the judge asked.

'I'm afraid so your honour,' replied Mr Evatt.

'Tell me what it is?' Judge Balla said.

Mr Evatt then told the court he believed it was for 'religious reasons' before stopping to check with other lawyers.

He then told the court: 'She's a Muslim, your honour, a strict Muslim and according to my instructions she won't stand for anyone except Allah which I'm not particularly happy with,Your Honour'.

Ms Elzahed is suing the state over the 2014 counter-terrorism raid at her Sydney home

She was spotted leaving court on Wednesday after she refused to stand for judicial officer

The Muslim woman appeared at Sydney District Court on Wednesday for a civil matter

She was spotted leaving court on Wednesday after she refused to stand for judicial officer

Judge Balla then said 'no doubt' Ms Elzahed had been made aware of a recent offence created 'which may relate to such conduct'.

She said a decision on 'any action' would be made by others but the judge 'just wanted to check she's received advice'.

'Each occasion she doesn't do it may be a separate offence'.

The NSW government this year introduced a new offence for disrespecting the court.

The offence went into force on September 1 and it carries a maximum penalty of up to 14 days in prison and or a fine of up to $1000 if a person is found guilty.

Judge Balla last week refused to hear Ms Elzahed's evidence if she was wearing her niqab, which covers every part of her body in black cloth except her eyes.