John Damian Terence Macrae, 73, worked as a senior constable attached to Waverley police station in Sydney until he departed the force in 1983.
He has been accused of sexually abusing two girls during his time as an officer in the mid-1970s and molesting a third child victim in the mid-1990s.
On one occasion in 1977 soon after one of the alleged victims turned eight, Macrae was at home alone with her watching a Dracula movie on television.
Prosecutors allege that he blew cannabis smoke at her face before going to the bedroom and returning wearing a black robe with his genitalia showing.
He then allegedly showed her a pornographic magazine and asked her to lie naked on the bed like the models there before the sexual assault.
The other girl Macrae is alleged to have molested in the 1970s was a First Nations girl who attended his police station to report an unrelated sexual assault.
He allegedly molested her in his car and told her to clean herself up afterwards with a nappy.
In December, the 73-year-old was found mentally unfit to stand trial in the NSW District Court due to a decline in his diagnosed schizophrenia and general cognitive functioning spurred on by progressive brain disease and dementia.
A special hearing was then set down in front of a judge, instead of a jury.
On Tuesday, his lawyers made a bid in front of Judge Thomas Jones to permanently stay the 11 historical child sex charges against him.
Public defender Scott Fraser said decades of delay in getting the matter to a hearing and his client's mental decline provided the "exceptional" reasons the court required to end the case.
He added that so much documentary evidence had been lost over time.
Regarding the First Nations girl, Mr Fraser said there appeared to have been an investigation done in the 1970s with police deciding not to bring charges against his client at the time.
Prosecutor Paige Madden denied any such investigation had taken place, saying that there was only a preliminary inquiry.
The officer who spoke to the alleged victim at the time made veiled threats, calling her a "home-wrecker" and saying no one would believe her, the court was told.
She said delay was common for child sexual abuse cases - with alleged victims often waiting a long time to come forward to police with their complaints - and was no reason to stay the case.
While Macrae had an obvious mental decline, the special hearing would still give his lawyers the chance to thoroughly interrogate each complainant in the witness box to assess their honesty and reliability, Ms Madden said.
Judge Jones has retired to consider his decision which he will deliver on Friday.
Macrae is facing one charge of carnal knowledge with a girl between 10 and 16, seven counts of committing an indecent act on a girl under 16, two counts of aggravated indecent assault of a victim under 16 and one alternative count of inciting a girl under 16 to commit an indecent act.
He has not entered formal pleas but is taken to have pleaded not guilty due to the court's mental fitness finding.
1800 RESPECT (1800 737 732)
National Sexual Abuse and Redress Support Service 1800 211 028
13YARN 13 92 76
Lifeline 13 11 14
