Tyrrell neighbour faced damaging questions

Paul Savage, a neighbour of William Tyrrell's foster grandmother, has testified at an inquest.
Paul Savage, a neighbour of William Tyrrell's foster grandmother, has testified at an inquest.

Former high-profile NSW police detective Gary Jubelin has come under fire at an inquest into the disappearance of William Tyrrell over his questioning of an elderly neighbour during the investigation.

William was last seen at his foster grandmother's home on Benaroon Drive in Kendall, on NSW's mid-north coast, late on the morning of September 12, 2014.

Following the three-year-old's disappearance, Mr Jubelin questioned Paul Savage, who lived across the road from the property where William vanished.

The inquest heard Mr Savage had spent the morning on his daily two-hour walk, before eating breakfast on his patio and making two phone calls to his brother in Casino Hospital.

In the interview, Mr Jubelin said to Mr Savage there was a clear line of sight from his balcony where he'd been breakfasting to where William was last seen heading.

However, a photo taken from Mr Savage's balcony by Detective Sergeant Laura Beacroft - who joined the investigation in September 2015 - showed this was not the case.

It was shown to the inquest on Tuesday.

"He wouldn't have had a clear line of sight," Mr Savage's lawyer, Chris McGorey, said to Det Sgt Beacroft.

"Yes, I agree," she replied.

Mr Jubelin also told Mr Savage "the direction William was last seen heading ... was the direction right towards where you were sitting on the balcony having your toast".

Mr McGorey said this was another assertion not based on fact as police "simply didn't know what direction (William) went".

Mr McGorey said with the benefit of hindsight, questions put to his client should have been hypotheses rather than assertions because they effectively suggested detectives knew something to back up what they were saying.

"There are assertions in there that are damaging for my client," he said.

Mr Savage made two statements to police, was interviewed by detectives and participated in a video walk-through with police recreating his movements on the morning of William's suspected abduction.

He told the inquest he had been able to hear the sounds of children playing on the street as he ate breakfast on the balcony.

Police estimate William vanished at 10.15am "give or take five minutes".

At 9.59am, Mr Savage's phone records show he was making his second call to his brother, which lasted almost 10 minutes.

The inquest heard Mr Savage's late wife, Heather, had left for bingo at 10.37am on that day.

He said he was making tea and toast inside his home when a neighbour knocked on his door, alerting him that William was nowhere to be found.

Mr Savage said when he went across the street, William's foster grandmother had told him his foster mother had gone inside to make a cup of tea "and she came out and noticed the little boy was missing".

"She immediately did what anyone would do, she ran out looking for him," he said.

Mr Savage was challenged as to why he hadn't mentioned the cup of tea discussion in his first statement to police but insisted he was sure it had happened.

He then told the inquest that he had joined in the search for the little boy, going in the opposite direction to William's foster mother.

As Mr Savage gave his evidence to the inquest, police, sniffer dogs and SES personnel continued the search for William near Kendall for a second consecutive day.

Heavy machinery was used to move logs during the search of a sawmill on Herons Creek Road.

Australian Associated Press