The second "wife" of a convicted Islamic State terrorist and her family is facing a legal bill of up to $100,000 after they lost their lawsuit against police over a counter-terrorism raid.

Moutia Elzahed's lawsuit against police was thrown out by District Judge Audrey Balla this morning following a six-day hearing in which she caused controversy by refusing to remove her veil and could face a criminal charge after also refusing to stand because it was against her Muslim faith.

Ms Elzahed, who was the lead plaintiff, was not at Sydney District Court when Judge Balla found in favour of police dismissing all six claims of police brutality over the Operation Appleby counter-terrorism raid on her Revesby home which she shares with husband Hamdi Alqudsi and her two teenage sons.

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