Defence barrister Pauline David told the NSW Supreme Court on Monday Ms Dawson left teacher and former rugby league player Chris Dawson in 1982 after becoming aware of a close relationship he had formed with one of his students, known as JC.
Ms David said it was a "sad fact" that people at times make difficult choices in difficult circumstances and someone like Ms Dawson could disappear.
She said Dawson might have failed his wife as a husband, but he did not kill her.
Dawson, 73, has pleaded not guilty to murdering his wife in January 1982.
The crown case against Dawson in the judge-alone trial is that he killed his wife and disposed of her body because of his affair with JC.
Prosecutor Craig Everson SC said Dawson had called his wife a "fat and ugly bitch" and wanted to be with JC, whom he later married.
Dawson allegedly tried to sell his Bayview home without his wife's permission and briefly moved to Queensland to start a new life with JC before returning to Sydney in late 1981.
He was accused of twice contemplating hiring a hitman to get rid of his wife before allegedly telling JC he had decided against it because innocent people would be hurt.
Ms Dawson was reported missing six weeks after she disappeared.
Dawson arranged for a notice to be published in the local newspaper a day after the couple's wedding anniversary on March 27, 1982, which read: "Lyn, I love you. We all miss you. Please ring. We want you home".
Ms David told the court on Monday the police investigation into Ms Dawson's disappearance had been flawed and they had failed to follow up alleged phone calls from her and sightings of her after she had supposedly been murdered.
There was one possible sighting of Ms Dawson near Gladesville Hospital between April and July 1982, another possible sighting on March 28, 1983, by someone she knew well, while a former neighbour claimed to have seen her in June or July 1984.
The defence barrister said the police investigation had caused great prejudice to Dawson and been plagued by inexplicable delays, the loss of records and a wilful disregard by some detectives to chase leads because they had already formed a view about what had happened.
Responding to the hitman claims, Ms David said there was not a "scintilla of truth" to them and they were "emphatically and utterly denied".
The trial before Justice Ian Harrison continues.
