William Tyrrell's former foster mother has admitted twice assaulting another child but denies intimidating the victim despite secret recordings revealing animosity between the pair.
The woman appeared with her partner at Parramatta Local Court on Monday for the start of a five-day hearing.
The two assaults to which the 58-year-old pleaded guilty occurred on Sydney's north shore in January and October 2021.
The two counts of intimidation, to which she has pleaded not guilty, involve a series of alleged incidents between January and August that same year.
Her 56-year-old partner, the former foster father of William Tyrrell, has pleaded not guilty to one count of assault and one count of intimidation over alleged conduct in November 2020 and October 2021.
The couple and the child victim cannot be identified for legal reasons.
Prosecutors will use statements and alleged threats heard from the foster mother through covert recordings in her home to prove a tendency in her actions, the court heard.
The woman's lawyer, John Stratton SC, unsuccessfully opposed that plan, saying that if threats to smack a child were criminal conduct there would be offences occurring in "maybe every household in Australia".
In one of the recordings, a "smack, smack, smack" sound was heard and in another the alleged victim called the woman a "f***ing bitch", the court was told.
The couple had a long-running dispute with the child, who was upset they had brought another foster child into the home.
Threats were made about ending her time in foster custody.
Magistrate Susan McIntyre allowed prosecutors to use the evidence, saying it showed a pattern of conduct.
But she binned a psychologist's report that prosecutors hoped to use as evidence against the foster mother, saying the case was not a test of her parenting skills.
Ms McIntyre also rejected an application by the foster mother to have the remainder of the hearing held in a closed court, adding that existing suppression orders were enough to protect the identity of the child.
In August, police dropped one charge against both the man and the woman of dishonestly obtaining a financial advantage or causing disadvantage by deception.
At the time, the couple said they would plead guilty to downgraded charges of procuring another person to make a bid on behalf of a seller at auction, resulting in a fine.
The pair paid a dummy bidder to bump up the auction price of their north shore home in December 2020.
Mystery surrounds the 2014 disappearance of William Tyrrell, who was three years old when he vanished from a property belonging to his foster grandmother at Kendall on the NSW mid-north coast.
Police have consistently sought answers in the years since his disappearance, including conducting a thorough search of the Kendall property in December 2020.
In June, lawyers for the foster mother called on detectives to respond to reports that criminal proceedings were being considered against her over William's disappearance.
Neither foster parent has been charged in relation to that case, however the mother was acquitted in 2022 of lying to the NSW Crime Commission about hitting another child with a wooden spoon.
The hearing on the assault and threatening charges continues on Tuesday.