31-year-old Rohingyan woman Latifar with her sick newborn baby.

Latifar with her sick newborn baby, Ferouz. Photo: Supplied

Lawyers for a refugee family fighting to stay in the country with their sick newborn baby are "extremely confident" a court will find the infant has a right to Australian citizenship.

But they are yet to determine what that will mean for his parents and two siblings.

The case returned to the Federal Circuit Court in Brisbane on Thursday for the third time, with lawyers representing the Commonwealth and those acting for the family making further submissions about whether the court had jurisdiction over the matter.

Lawyers for the Commonwealth argue the matter must be heard by the High Court, but the family's legal representatives say recent changes to the Migration Act give the Federal Circuit Court sufficient power to hear the case.

"This is a stalling tactic from the Commonwealth government," Murray Watt of Maurice Blackburn Lawyers, who has taken carriage of the case on a pro bono basis, told reporters outside the court.

He said Immigration Minister Scott Morrison could intervene at any time to help the family by granting them protection visas.

"He can step in at any moment to do that and then this whole legal action would go away," Mr Watt said.

"But rather than doing that the Commonwealth continues to stall and continues to bring this before the court. I’d encourage the Commonwealth to really reflect on its position about that especially in the wake of some of the things we’ve seen in the public debate this week."

As Fairfax Media revealed earlier this month, the baby boy named Ferouz was born in Brisbane’s Mater Hospital on November 10, after his diabetic mother Latifar was transferred to the mainland from Nauru for the birth, along with her husband and two other children.

Four days after giving birth by caesarean section, Latifar was separated from her son and allowed to visit him only between 10am and 4pm at the hospital.

Ferouz has respiratory problems and needs constant medical care.

He has since been returned to the Brisbane Immigration Transit Accommodation Centre with his family, but he remains very weak, according to the family's legal representative.

"He hasn't got enough energy to breastfeed," Mr Watt said.

Judge Margaret Cassidy is expected to decide on Friday whether the case falls within her jurisdiction.

However, Mr Watt said he was extremely confident Justice Cassidy would find in the family's favour, at least with respect to baby Ferouz's right to citizenship in Australia.

"We argue that because Ferouz was born in Australia to parents who are stateless, and he is himself therefore stateless, he has a right to apply for Australian citizenship," Mr Watt said.

"In our view he is not an unauthorised maritime arrival."

But Mr Watt could not say what that would mean for the other members of the family.

"To be honest, we have still got to work that through ourselves," he said. "We would need to examine the rights of the rest of the family in light of that."

Earlier this week, the United Nations High Commissioner for Refugees delivered a scathing report on living conditions in the Nauru detention centre, finding the facility was inappropriate for children.

And Myanmar opposition leader Aung San Suu Kyi reportedly told a Sydney audience on Wednesday night that in Ferouz’s case Australia must remember ‘‘justice has to be tempered by mercy’’.

- with AAP