Bill Spedding was earning a quiet living as a washing machine repairman based in Bonny Hills on the mid-New South Wales Coast, when his life suddenly changed in 2014.

After responding to a work call out, he became a key 'person of interest' in one of the state's largest police investigations in history: the disappearance of 3-year old William Tyrrell.

Last week, Mr Spedding's lawyers filed a lawsuit in the NSW Supreme Court, accusing the NSW Police Force of misfeasance in public office, abuse of process and malicious prosecution.

Court papers claim the intense police interest and media scrutiny Mr Spedding has endured have had a devastating effect on him, and he is seeking $1 million in compensation.

False accusations

New South Wales police declared Mr Spedding a 'person of interest' in the disappearance after they found a spider man toy in his work van just days after the boy went missing from his grandmother's home wearing a spider man suit.

Mr Spedding admitted being at William's foster grandmother's house several days beforehand, where he quoted her on a broken washing machine, but he has always vigorously denied any involvement in boy's disappearance.

In January 2015, police searched Mr Spedding's home and drained his septic tank, but found no evidence linking him to any crime.

It's also been reported that all three of Mr Spedding's grandchildren told police the spider man toy found in his van was purchased from a second-hand shop.

Despite this, police went on to label Spedding as a paedophile and charged him with numerous historical sexual offences. The charges were later dropped due to a lack of evidence.

Coronial Inquest

Evidence recently presented at the current coronial inquest into William's disappearance firmly established that Spedding was nowhere near Kendall, about a 20-minute drive from his home in Bonny Hills, on the morning the boy went missing.

The inquest has thrown up many more questions than it has managed to answer. How can a little boy, playing on his foster grandmother's verandah on a dead-end street in a small country town, simply vanish?

For almost five years, police have been working to understand William's disappearance, and determine whether the young boy is dead or alive.

There is no forensic evidence or other direct evidence to link any person to the disappearance, despite multiple searches of nearby bushland.

The inquest is in the process of interviewing more than 50 witnesses, but no one has been charged with a crime over one of Australia's most enduring mysteries.

Taxpayers foot the bill

The allegations of misfeasance in public office, abuse of process and malicious prosecution are part of tort law, which comes before the civil courts.

Under the law, a person may have the right to legal redress if they can prove sufficient wrongdoing and this can result in them being awarded damages, and in some cases an injunction to stop the issue from continuing or occurring again.

While not all consequences of tortious conduct result in an award of damages, aggrieved persons may have a right to legal redress if they can prove, on the balance of probabilities, that they have been the victim of a tort.

In the vast majority of cases where individuals successfully sue police, tax payers ultimately foot the bill for the force's legal representation, as well as the plaintiff's legal costs and any compensation award.

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