The man, 59, had been found guilty by a County Court jury after a 12-day trial of two charges of sexually penetrating a child under the age of 16 and was jailed for four years with a non-parole period of two years and six months.

He appealed against his convictions, claiming to have been the victim of a miscarriage of justice.

Court of Appeal Justices Phillip Priest and John Dixon, in a majority 2-1 judgment handed down on Wednesday, upheld the man's appeal and ordered he face a retrial. Justice Mark Weinberg rejected the appeal.

Outlining the case against the uncle, Justice Weinberg said the victim had lived with her parents and older sister and brother at Hoppers Crossing. Her uncle also lived at Hoppers Crossing with his two children, who were six and seven years older than their cousin.

"In about 1998, when she was in grade five, she asked her mother if she could have dance lessons," the judge said when summing up the victim's evidence at trial.

"She was told that her mother was not prepared to pay for them.

"Instead, she organised for the complainant to be taught dancing by the appellant (the uncle), who had some experience in 'rock and roll' dancing."

Justice Weinberg said the dance lessons took place at the uncle's house after school, at about 3pm or 3.30pm.

The victim estimated she had about five dance lessons over a month in the large tiled area in her uncle's kitchen.

"The dancing required her to 'partner up' with the appellant," the judge said.

"They had to be close together, which made her feel uneasy and uncomfortable.

"She claimed that during the first lesson, he placed his hand on her for a long period of time in "inappropriate places".

"She said that his hand was very low down her back, or by her bottom. After the first lesson, she told her brother that she did not want to go back to the appellant's house any more because she felt uncomfortable. Her brother told her that she was being ungrateful, and that she should continue to attend the lessons."

Justice Weinberg said the victim claimed her uncle went on to sexually abuse her during two dance lessons. She did not report the abuse until a decade later when she confided in her boyfriend before going to the police.

The uncle denied abusing the girl or ever having given her dance lessons.

He claimed he would start work at 7am and not return home until between 4pm and 4.45 pm when his two children were usually there.

The uncle's children gave evidence that they had never seen their cousin attend their home for dance lessons.

Justice Weinberg rejected the uncle's claims that he had been wrongly convicted but Justices Priest and Dixon disagreed.

The two judges found the trial judge had failed to adequately direct the jury about the long delay in the victim coming forward, and that the uncle had been at a disadvantage because of this when it came to defending himself against the accusations.