A former neighbour of Chris Dawson has told a Sydney court they saw Lynette Dawson working at a hospital more than two years after she vanished.
Mr Dawson, 73, has pleaded not guilty to murder and denies involvement in Lynette's disappearance in January 1982.
There have been no verified sightings of her since.
Mr Dawson is accused of murdering his first wife in order to pursue an "unfettered relationship" with a woman known as JC, who was the family babysitter and a student at the high school where he taught.
Peter Breese moved into a property close to the Dawson's Bayview home in late 1979 and in court recalled inspecting the Dawson's chimney for them, which he concluded had not been correctly constructed.
There were then "only brief conversations", but Mr Breese told the NSW Supreme Court that in June 1984 he was recovering from nasal surgery at Rockcastle private hospital when he saw Ms Dawson in a nurse's uniform at his room's door.
It had been two-and-a-half years since he had last seen her.
"What did you notice about her face, if anything?" Crown Prosecutor Craig Everson SC asked.
"Certainly her glasses, hair, physique," Mr Breese told the court.
"They were large, round glasses," he said, adding they were the same as photographs he'd later found on Google to prepare for a 2020 committal hearing.
Mr Breese was given a general anaesthetic for the surgery to straighten his septum.
He said he was in hospital for six days, but could not pinpoint the date of the brief sighting, which lasted "five to 10 seconds" in the late afternoon or evening and involved no words being exchanged.
"It certainly wasn't the day I was operated on," he said.
The court heard he was in bed and not wearing his glasses at the time, which he required for driving.
Mr Breese said one day when his wife came to visit the hospital after work she said: "I've seen Lynette Dawson."
"I said, 'well I've seen her too' … I may have also added 'I've seen her too, the night before'."
Mr Breese said the couple did not know Lynette Dawson was missing until about 1987, when they saw a missing person's column in a newspaper.
It was put to Mr Breese that he could have seen a woman who simply "looked like" Ms Dawson.
"I believe it was Lynette Dawson, but you know, there's only a couple of perfect things in life," he replied.
Under cross-examination, Mr Breese again said he had "no doubt" the woman he saw was Ms Dawson.
Mr Breese said when they saw the missing person's column, his wife called a police station and had a conversation with a young constable who said he'd speak with a detective.
Mr Breese claimed his wife received a call back from police who said, very briefly, that "Lynette Dawson was under the pool".
The court heard his wife, Jill, is unwell and won't give evidence to the trial, however an audio recording of her evidence to the committal hearing is being played.
In the recording, Jill Breese also insisted the woman she saw in the hospital was Ms Dawson.
"It wasn't strange to see her there, I thought, because of her occupation," she said.
Asked whether she could be mistaken, she replied: "I don't believe I was mistaken, but it's a possibility, isn't it?"
Ms Breese also recalled being told the "under the pool" comment by police years later on the phone.
"I was shocked," she said.
"I didn't think it was very professional."
The judge-alone trial, before Justice Ian Harrison, continues.
