Teacher's Pet case: 'No doubt' neighbour saw Lynette Dawson year after she went missing

Chris Dawson and his wife Lynette Dawson before she went missing from their Bayview home. Photo / news.com.au

Lynette Dawson's former neighbour has "no doubt" he spotted the missing mother of two working at a Sydney hospital more than a year after she went missing, a court has been told.

Chris Dawson, 73, is standing trial in the NSW Supreme Court charged with the murder of his wife Lynette who vanished from their Sydney northern beaches home 40 years ago.

The prosecution alleges that Dawson was motivated to kill his wife so he could have an "unfettered" relationship with a former student and the family's babysitter, who can only be known as JC.

Dawson has pleaded not guilty, arguing that his wife contacted him several times after she went missing in January 1982 and she had been sighted several times.

On Friday, one of the Dawsons' former neighbours Peter Breese told the court that he briefly saw Lynette after undergoing an operation at a Sydney northern beaches hospital in June 1984 – 19 months after she was last seen.

JC on the day she and Chris Dawson set out for Queensland with the intention of starting a new life. Photo / news.com.au

He said he was lying in his hospital bed recovering when a woman, who he believed to be Lynette, came to the door.

"It was brief but it stuck in my mind because if someone comes to the door, they're there for a reason," he said.

"And then you look at them, they literally spin on their heels and turn very quickly and walk away and never come back."

Breese was asked by Dawson's lawyer Greg Walsh: "When you saw her, did you have any doubt it was Lynette Dawson?"

Breese replied, "I had no doubt it was her."

Breese later added he could not be 100 per cent certain of anything in life and there was a "possibility" he was mistaken.

Breese and his wife Jill lived on acreage at Torumba Ave, Bayview, that backed onto the Dawson family home at Gilwinga Drive.

He told the court that he had seen Lynette in her backyard and was once invited over to their house to look at a faulty fireplace.

He said he was familiar with her appearance, including her glasses and hair.

The court was told that Breese was in June 1984 in Rock Castle Private Hospital – now South Pacific Private Hospital – at Curl Curl for an operation to straighten his septum.

He said during his stay he saw a woman in a nurse's uniform standing about 3m away in the doorway.

A police missing person's report for Lynette Dawson. Photo / news.com.au

The court has previously been told that Lynette worked as a nurse at a Warriewood childcare centre before she disappeared.

The court was told on Friday that Breese later had a conversation with his wife, when she came to visit him in hospital, who told him: "I've seen Lynette Dawson."

Breese told the court on Friday that he replied: "Well, I've seen her too."

Breese told the court that at the time he did not make much of the incident because he was not aware she was missing.

He told the court that he didn't become aware that she had vanished until he saw a missing person's item in the Manly Daily in 1986 or 1987.

He said he could not read the name on the woman's nurse's badge and did not have his glasses on at the time.

The former neighbour of the Dawsons also told the court that while he had a general anaesthetic for the operation, his reported sighting did not happen on the same day he underwent surgery.

The trial continues.