Two years ago, the boss of Sydney engineering services company AllRound Access and his wife paid $5 million for a "dilapidated" house nestled above Cobblers Bay Beach.

Earlier this year, they lobbed a development application to Mosman Council, proposing to knock down the existing three-storey home.

In its place, they planned a new $2.5 million four-level, four-bedroom and four-bathroom home featuring a range of high-end mod-cons like a "vehicle stacker with a car workshop" and a "car turntable" which "enables vehicles to enter and exit the site in a forward direction".

But when the neighbours found about the plans they weren't happy – particularly when the wrecking ball had allegedly already started swinging.

One of the Guvens' neighbours is controversial mining magnate Travers Duncan, worth an estimated $686 million, according to BRW, and a man not shy of calling in the lawyers.

Mr Duncan, who was found to have acted corruptly by the Independent Commission Against Corruption, by concealing the involvement of the Obeid family in a coal tenement, has repeatedly engaged lawyers to try and clear his name.

He was behind a failed High Court action that tried to strike down retrospective laws passed by the NSW Parliament to validate a swath of corruption findings, in a legal battle against the ICAC. His lawyers claimed the laws overstepped parliament's powers under the Constitution.

He has failed twice in a bid to overturn findings, and is seeking leave to appeal in High Court, against him and three associates over a multimillion-dollar coal deal.

Mr Duncan's neighbours proposed a new 15-metre high house – almost double the height restriction of 8.5 metres – arguing that because it was built into a cliff face it should be allowed.

The proposal upset Mr Duncan who fired off an objection to council, alleging unauthorised works had been undertaken on the property such as partial demolition. The proposed height of the new house "grossly exceeded" council guidelines, he added, demanding council erect poles to show the true height and nature of the proposed development.

In June, Mr Duncan doubled down on his objections, instructing lawyers to submit further objections to council on his behalf. They included height and floor space, shadowing and lack of light as well as concerns about lack of privacy in the Duncan backyard.

Other high-flying neighbours, financiers Peter and Anne Rozenauers, also took up the fight, alleging the Guvens began to demolish the building without permission shortly after taking control of the property.

"Since January 2015 we have had to endure dust and debris being carried onto our property, with the remains of the building being a fire hazard and attractions for rodents and other animals," the Rozenauers told council.

Mosman Council considered the proposal and then, last month, decided to reject the application. It cited as many as 20 grounds, from the height of the proposed building to the lack of detail in the application, sending the Guvens back to the drawing board.

"It's disappointing," Mr Guven said, claiming council had not responded to their offers of more consultation. He described the proposed rebuild as "nothing out of the ordinary" and flagged an appeal.

As for the partial demolition of the house, Mr Guven said ripping up some old carpet created a "snowball effect": termites were found in a door, then the roof and windows.

"A quarter of the house was gone by that time as I chased these termite nests," he said.

"It was always our intention to rebuild the house."

It's unclear who will be hosting neighbourhood drinks this Christmas.

with Patrick Begley