Justice Richard Refshauge on Tuesday set aside the orders of a magistrate after he found the basis of the sentence that had been imposed had been incorrect.

The boy – who was aged 13 at the time of the offence - will now be resentenced in the ACT Supreme Court over the sexual assault in November 2013.

The court heard the boy and his eight-year-old step-sister had been trading the collector cards when he offered to give her three if he could touch her.

The boy then committed a number of sex acts on the girl, despite her objections and cries of pain.

The offender pleaded guilty in the ACT Childrens Court to charges of committing an act of indecency, sexual intercourse with a young person under 10, and attempted rape.

A victim impact statement from the girl said she thought "he should be only allowed near girls young or old if he is supervised and there is someone with me because he only does it in secret".

He was rated as a low to mid-range risk of reoffending.

Last year, a magistrate convicted the boy for the three offences and made a good behaviour order for two years.

But the boy's lawyer, Paul Edmonds, appealed the sentence, arguing it had been manifestly excessive as the boy would be placed on the child sex offenders register as a result of the conviction.

Mr Edmonds also argued the magistrate had failed to take into account individualised justice, erred by treating the relationship with the victim as an aggravating feature, and did not give sufficient reasons to reject a request for a non-conviction order.

Obligations imposed on a registered sex offenders include annual reporting to police, obligations to tell the authorities of intentions to travel interstate or overseas for more than a week, bans on applying for or engaging in child related employment, and providing names and ages of children the offender has regular unsupervised contact with.

Justice Refshauge said the obligations posed potential problems for a high school student, as teachers did not always directly supervise students at all times during the day.

But he found that interpretation would take "too precious an approach to this issue".

"I hold that while a student, who is a registrable offender, is at school during ordinary school hours, including reasonable periods before and after, formal classes and activities begin and end any contact with children there is to be considered, for the purposes of the Child Sex Offenders Act, to be supervised contact and not reportable," Justice Refshauge said.

"To take any other approach would mean that, effectively, a child who was a registrable offender could not go to school."

But Justice Refshauge found the magistrate had made a sentencing error by finding the offences had been an abuse of trust.

"There was … no evidence to suggest that the special obligation of trust was imposed on OH, even if he were of an age to understand such an obligation," he said.

"In my view, the learned Magistrate took into account an irrelevant consideration.

"Accordingly, the appeal must be upheld."

Justice Refshauge ordered updated reports so he could impose a new sentence.