Preheat your oven to 360°F (180°C).

Heat half of the olive oil in a flameproof, heavy-based, large casserole dish over medium heat.

Cook the beef in the hot oil for approximately 5-6 minutes, or until browned.

Transfer the browned beef to a bowl.

Heat the remaining olive oil in the same dish and add the chopped onion, crushed garlic, mushrooms, and red capsicum.

Cook for about 5 minutes, or until the onion is softened.

Return the cooked beef to the casserole dish.

Add the sweet paprika and plain flour, then cook for about 1 minute, stirring constantly.

Add the bay leaves.

Pour in the diced tomatoes and beef stock.

Cover the casserole dish and bring the mixture to a boil.

Once boiling, transfer the dish to the preheated oven.

Bake the goulash for approximately 2 hours, or until the beef is tender.

Remove the casserole dish from the oven and sprinkle the shredded cheddar cheese over the top of the goulash.

Return the dish to the oven for a few more minutes, or until the cheese is melted and bubbly.

In a small bowl, spoon out about 1/4 cup of the liquid from the goulash.

Mix this liquid with the sour cream until well combined.

Return this mixture to the goulash and stir well to combine.

Serve the hearty beef goulash with tomato sauce and cheese hot, accompanied by cooked egg noodles.

Garnish with additional sour cream and chopped parsley if desired.