The son of a Scottish-Australian merchant and politician, Watt was born in England and moved to Sydney when he was one year old, returning to Britain at the age of eleven for education at Bristol and Cambridge.

The first Australian to qualify for a Royal Aero Club flying certificate, in 1911, Watt joined the Aviation Militaire of the French Foreign Legion as a pilot on the outbreak of World War I.

A recipient of France's Legion of Honour and Croix de Guerre, and twice mentioned in despatches during the war, Watt was appointed an Officer of the Order of the British Empire in 1919.

[5] On a subsequent trip to England he took flying lessons at the Bristol aviation school on Salisbury Plain, where his fellow students included Eric Harrison.

[6][7] Upon his return to Australia later that year, he publicly declared that the time was "rapidly approaching when an aero corps [would] have to be inaugurated" as part of the country's "military defence scheme".

[7] In March 1912, Watt recommended a location in Canberra near the Royal Military College, Duntroon, as a base for the Army's proposed Central Flying School.

[8] Petre eventually chose 297 hectares at Point Cook, Victoria, an area suitable for seaplanes as well as land-based aircraft, to become the "birthplace of Australian military aviation".

[13][14] Fired by the widely held conviction that Britain would stay out of a European conflict, Watt offered his services and his plane to the French government on 2 August, the day France declared war on Germany.

44 in April 1915, he earned the Legion of Honour badge after he and his observer crash-landed in no man's land and succeeded in making their way back to French lines with valuable intelligence under intense fire from German positions.

[16] The French recognised that Watt's talents were not being fully utilised due to his ineligibility to lead a squadron, and recommended that he transfer to the Australian Flying Corps.

1 Squadron was engaged mainly in aerial reconnaissance and army co-operation duties, but the two-seat B.E.2 proved inferior to German Fokkers and Rumplers in speed, time-to-climb, and manoeuvrability.

[1][19] He was mentioned in despatches by General Archibald Murray, Commander-in-Chief of the Egyptian Expeditionary Force, on 13 October; the commendation was promulgated in the London Gazette on 1 December.

During the Battle of Cambrai that commenced on 20 November 1917, Watt led his pilots on daring low-level bombing and strafing attacks against enemy fortifications and lines of communication.

[4] Six of Watt's officers were awarded the Military Cross for gallantry during the battle, prompting General Sir William Birdwood to send him a personal message of congratulation on 16 December, declaring: "...

[27] Shortly after the end of hostilities in November 1918, novelist William John Locke visited 1st Training Wing and found that "there was not one [of Watt's men] who ... did not confide to me his pride in serving under a leader so distinguished".

[4] A pilot later opined that as well as having "courage, determination, and an immense capacity for work", Watt possessed "the greatest factor in leadership, a genius for endearing himself (without conscious effort) to all who served under him".

[1][4] He also served as senior delegate on a committee of veteran military pilots examining applications for appointment to a proposed independent Australian air service.

Winners of the award have included Charles Kingsford Smith, Bert Hinkler, Henry Millicer, Ivor McIntyre, Jon Johanson and Andy Thomas.

[31] In 2001, military historian Alan Stephens noted that "had fate drawn him to a post-war career in the Air Force instead of to business and an untimely death, 'Toby' Watt might have challenged Richard Williams as the RAAF's dominant figure in its formative years".