The ACT Magistrates Court has also heard allegations Ivan Bruno Kovacic made racist slurs and grabbed a man's genitals before, as that man put it, "everything went downhill".

Mr Kovacic, a decorated veteran of the Australian Federal Police, has pleaded not guilty to a charge alleging he committed an act of indecency without consent on one of this man's female friends.

The 52-year-old denies claims a November 2019 gathering at his Civic unit ended with him forcing the woman's hand onto his penis and trying to pull her shorts down against her will.

On Tuesday, the fourth day of a hearing into the charge, a man who was living in the same apartment complex at the time in question gave evidence.

He said he, the alleged victim and another of their friends, all foreigners who were in Australia for work, were having a barbecue and using the complex's "hot tub" when they got talking to a local later identified as Mr Kovacic.

The man said Mr Kovacic invited the trio to his apartment to try some Australian craft beer, and he went with the other two, who were more enthusiastic than him, mainly to ensure their safety.

He told the court he was shocked when, some time after their arrival at the unit, the host changed into nothing but a pair of white briefs.

The man said he told the Australian, using "a little bit of profanity", to "put some clothes on".

After Mr Kovacic donned a shirt, he said, the group sat on a sofa and spoke about vape juice and other topics he was unable to recall.

The man said when he and his fellow foreigners eventually got up to leave, their host blocked their path and made the comment about the gathering being a party.

"And then he did some weird dance," the witness told the court.

The man alleged that, as he tried to leave, Mr Kovacic grabbed his genital area and asked if it was "true what they say" about people of his race.

He said he pushed the Australian's hand away, only to be punched "directly between my eyebrows" by him.

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The man said he managed to block a second blow before responding with a strike of his own, hitting Mr Kovacic in the face and knocking him out.

The other man in his group pulled him out of the apartment at this stage, he said, leaving the only woman among them to tend to Mr Kovacic and make sure the Australian was OK.

It is during the woman's efforts to clean blood off Mr Kovacic, who was left with a black eye, that the 52-year-old is accused of committing the act of indecency on her.

Under cross-examination by defence lawyer Tim Sharman, the man who gave evidence on Tuesday accepted CCTV footage from after the incident in Mr Kovacic's unit showed him walking around the complex without a shirt.

He denied this was because he had removed it while dancing to music with Mr Kovacic in the apartment, saying he had ripped it off after being punched because he was "in a mood to fight" by that stage.

The man also rejected suggestions that surveillance video from a lift showed him playfully "tickling [Mr Kovacic's] behind" on the way up to the police officer's unit.

Mr Sharman ultimately put to the man that he had only punched Mr Kovacic because the Australian's manner of dancing had annoyed him.

The witness denied this, along with the suggestion he had made up the claims about racist slurs and touching of his genitals, the latter of which is not the subject of any charge, because he was worried about "knocking a fellow out" and needing to have justification.

Magistrate Louise Taylor will hear closing submissions in the case at a later date.

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