Judge Garry Neilson "seriously undermined public confidence in the judiciary" when he said that, like homosexuality, the community may no longer see sexual contact between siblings, as well as between adults and children, as "unnatural" or "taboo".

In closing submissions to the Judicial Commission's three-member conduct division on Tuesday, Counsel Assisting Philip Strickland SC said Judge Neilson's comments caused widespread outrage and universal condemnation, and the public expected consequences.

But Mr Strickland asked the panel not to refer Judge Neilson to a joint sitting of parliament, where he could ultimately be removed from the bench, because he has "disavowed holding these views".

Mr Strickland said the panel should accept Judge Neilson's evidence during the hearing on Monday that he finds incest immoral and accepts it is illegal not only because of the high risk of chromosomal abnormalities to children born of consanguineous relationships, but due to its destructive impact on families.

Had the highly experienced judge maintained or defended the comments, a referral to parliament would be warranted, he said.

But Judge Neilson's barrister, Phillip Boulten SC, said the complaint should be summarily dismissed because what he meant was that while juries had once considered sex between a man and his sister or between an adult and a child "implausible" and "rare", they now accepted that this type of activity took place.

"He got off on the wrong foot by using the term unnatural and drawing in the word taboo just exacerbated it," Mr Boulten said. "It was inadvertent. It was not intended."

Mr Strickland said the panel should refer Judge Neilson to the Chief Judge of the District Court, Derek Price, and consider recommending a ban on him sitting on sex crimes trials.

But Mr Boulten said this is unnecessary as Judge Neilson has learned his lesson.

"This has been a scarifying experience … It's been an excruciating process," he said.

"In my submission, he has been so publicly exposed for his errors there is no need to further consider this complaint."

He added a ban would be difficult in a practical sense as one-third of District Court cases involve charges of a sexual or indecent nature.

The court heard Judge Neilson had restarted hearing all types of criminal trials after period of presiding over civil matters only.

During the hearing on Monday, Judge Neilson said he sincerely regretted making the comments during the 2014 case of a 58-year-old man known as MRM who was charged with repeatedly raping his younger sister in the family's western Sydney home in 1981.

The Director of Public Prosecutions stepped in after Judge Neilson refused to allow the jury to know the man had earlier pleaded guilty to sexually assaulting his sister when she was 10 or 11 years old in 1973 or 1974.

Judge Neilson also denied the Crown prosecutor's request to admit into evidence a telephone conversation between the siblings in July 2011, recorded by police, in which MRM admitted to having sexual contact with her when she was "a kid" to "get his rocks off".

The Court of Criminal Appeal overturned Judge Neilson's ruling and the case was sent back to the District Court where MRM was convicted of carnal knowledge and incest and given a two-year suspended sentence and community service.

Following public outcry by the comments, the then attorney-general Brad Hazzard and Liberal Senator Bill Heffernan referred him to the Commission, which examines complaints against judicial officers.

The panel - Supreme Court Justice Nigel Rein, former Industrial Relations Commission president Roger Boland and parliamentary appointee Rosemary Sinclair – reserved their decision.

On August 4, Fairfax Media published an article on this website about Judge Garry Neilson.  The article was accompanied by a photograph of Judge Neilson and another photo of Judge Peter Zahra SC who was incorrectly identified as Judge Neilson.  Some readers may have understood that statements made by Judge Neilson which were being examined by the Judicial Commission were in fact made by Judge Zahra. Any such interpretation was incorrect.  Fairfax Media apologises to Judge Zahra for any hurt or embarrassment caused.