Police planted William Tyrrell Spiderman suit on a walking track and hid in bushes to see if a suspect in the disappearance of William Tyrrell took it, a court has heard.

Mr Savage came into the cross-hairs of detectives in mid-2017 when the Tyrrell investigation had been running for more than two years.

In July that year, police planted the costume, similar to the one William was wearing when he vanished on the NSW Mid-North Coast, and used hidden cameras to film Mr Savage's reaction.

The details of the sting were revealed in Sydney's Downing Centre Local Court where Mr Jubelin — the lead detective on the case — is facing charges of illegally recording four conversations with Mr Savage.

Mr Jubelin denied wrongdoing in relation to the recordings, insisting he had an operational need to record them.

Mr Jubelin's former colleague, Detective Sergeant Laura Beacroft, said surveillance operatives were hiding in the bush with cameras and saw Mr Savage stop at the suit.

"The footage showed him stopping for a period of 12 seconds," she told the court.

"I believe Mr Savage was some distance away from the suit, approximately five to eight metres."

Mr Savage did not report the suit to police until the following day and later insisted in a recorded police interview with Mr Jubelin that he had not seen it the first day.

A video of the interview was played to the court on Wednesday, in which Mr Jubelin tells Mr Savage he knows he is lying.

"You're badly mistaken," Mr Savage replied.

Detective Beacroft described the track as "a deviation from the main fire trail" which had "heavy scrub" either side.

She said the operative filming Mr Savage was "up to 30 metres away".

Mr Savage, who lived close to William's foster family, has never been charged in relation to William's suspected murder.

During today's hearing it was also revealed Mr Savage was the subject of an AVO for stalking a female post office employee.

Mr Savage's AVO was taken out by a woman from a post office on the Mid-North Coast, who claimed he followed her on her mail route in September 2012.

Mr Jubelin's matter is set down for five days.