Giving evidence at his brother's murder trial on Monday, Peter Dawson said he never asked any questions when Mrs Dawson vanished in January 1982 because his wife's mother had done the same.
"Chris' wife was aware that my first wife's mother had left and done just that, not contacted her family, and for that reason, I didn't believe it was unusual," he told the NSW Supreme Court.
Dawson, 73, is accused of killing his wife and disposing of her body so he could have an unfettered relationship with one of his former students, known as JC, while retaining full ownership of assets such as their family home in Bayview, Sydney. He has pleaded not guilty to the charge.
On Monday, Peter Dawson denied telling his brother that he could lose 40 to 60 per cent of all assets plus custody of their two children if he left Mrs Dawson.
Not only was this bad advice, but he was not aware his brother was experiencing marital problems until after Christmas 1981, he told the court.
JC has previously testified that, before Mrs Dawson's disappearance, she overheard a phone call between the two brothers about what would happen to the family assets if the marriage ended.
Also testifying on Monday, former co-worker Judith Solomon said she had seen Mrs Dawson with a "huge, horrible black eye" when bumping into her at the Warringah shopping centre.
"It was going green. It was going across the bridge of her nose into the other eye. It was really, really bad," she said.
Dawson then jerked on his wife's arm and asked her why she'd removed her sunglasses to reveal the injury, Ms Solomon said.
She and Mrs Dawson worked together in the 1960s at the Bank of NSW, which is now Westpac. After the mall, Ms Solomon went to the Dawsons' Bayview house.
The visit was quick with Ms Solomon asked to leave before Dawson arrived home. Mrs Dawson purportedly said her husband would be angry if he found out she had visitors.
Ms Solomon said she had a spiritual connection with Mrs Dawson, telling the court that the pair had engaged in "astral travelling" and had flown together around Sydney in a dream-state.
Dawson's barrister Pauline David questioned Ms Solomon's evidence, saying that Mrs Dawson had a reddened eye and that Dawson did not pull on his wife's arm as suggested.
She claimed Ms Solomon had transformed her story about an ordinary event into a sinister one because of what she had heard in The Teacher's Pet podcast, released by Hedley Thomas in 2018 about Mrs Dawson's disappearance.
In a police interview from 1991, played to court on Monday, Dawson denies the murder allegations, saying they came about because of a heated custody battle with JC, who he married in 1984 and separated from in 1990.
"The whole purpose of [JC] raising the allegations is to slur my character with an upcoming custody battle which has turned extremely nasty and bitter," he told a detective.
JC's claims he had driven with her over the Sydney Harbour Bridge to hire a hitman to kill his wife were rejected by Dawson as a "complete and utter fabrication".
Dawson told the police he had lain awake at night crying waiting for his wife to call, and that he had still yearned for some contact even after starting his relationship with JC.
The hearing continues on Tuesday.
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