At 1543 Eastern Summer Time, the crew of a De Havilland DHC-8, operating under instrument flight rules (IFR), reported to the Flight Service 3 (FS3) officer that the aircraft had departed Armidale at 1543 for Sydney and was on climb to flight level (FL) 190. Two officers were operating the FS3 position: one officer was operating the radios and managing the flight progress strip display while the other was assisting at the coordination position. The crew of the DHC-8 had not been given a clearance to enter controlled airspace and consequently levelled the aircraft at FL125, which was the lower limit of the control area. The crew of the DHC-8 did not report this change of level to FS3, contrary to Aeronautical Information Publication (AIP) procedures (AIP NCTL - 4 paragraph 49.2)
While climbing to FL125, the crew of the DHC-8 was preoccupied with ascertaining the position of other traffic in non-controlled airspace on the FS3 frequency. There were between 18 and 21 aircraft on a number of retransmitted frequencies that were being monitored by FS3. Such a volume of traffic caused frequency congestion and made communication difficult. During this period, the FS3 operator was very busy providing traffic information to the pilots of IFR aircraft.
A Royal Australian Air Force Lockheed C130 aircraft, also operating under IFR, had departed Richmond for Walcha and was cruising in controlled airspace at FL130 on the reciprocal track to the DHC-8. The crew of the C130 had been cleared to leave controlled airspace on descent and was aware that the DHC-8 was opposite direction traffic below them. At 1548 the C130 crew reported leaving FL130 to the radar controller and changed to the FS3 frequency. However, to ensure that they could maintain separation with the DHC-8, they decided to maintain the aircraft at FL130 until they could establish contact with the crew of the DHC-8 on the FS3 frequency. Contrary to AIP procedures, the C130 crew did not report their intention to maintain the aircraft at FL130 to the radar controller nor did they report the aircraft's latest position of Mount Sandon to the FS3 operator. The FS3 coordinator stated that the frequency was "extremely congested" at the time.
At 1550 the crew of the DHC-8 changed to the Brisbane Centre radar control frequency in accordance with previous instructions from the FS3 officer. The crew reported their departure from Armidale and that the aircraft was approaching FL125. An airways clearance was not initially issued to the crew of the DHC-8. The Manual of Air Traffic Services (MATS 9-5-1 paragraph l) required controllers to positively identify aircraft prior to providing a radar service and to advise pilots whenever radar identification was established or lost. The radar controller did not notify the DHC-8 crew whether the aircraft was identified or not, but advised the crew of the DHC-8 that the C130 was 12 NM ahead and appeared to be maintaining FL130.
When the crew of the DHC-8 realised that a clearance was not imminent and that they were at a VFR level, they elected to descend to an IFR level, FL120. At that stage, the C130 was in controlled airspace with the crew attempting to communicate on the FS3 frequency (intended for the use by crews operating in non-controlled airspace) and the DHC-8 was in non-controlled airspace with the crew communicating with the radar controller (used by crews operating in controlled airspace).
At 1551.12, the radar controller advised the FS3 coordinator that the DHC-8 was still at FL125 and 8 NM directly ahead of the C130. The coordinator attempted to advise the FS3 officer of the situation but was unable to pass the information because of the number of transmissions from pilots. At 1551.16, the FS3 officer advised the crew of the C130 that they could disregard the DHC-8, as that aircraft was ".. well in controlled airspace". The comment implied that the DHC-8 was above the level of the C130. Based on his previous experience and understanding of the performance of DHC-8 aircraft, the FS3 officer believed that the aircraft had reached its cruising level and that it would not conflict with the C130. However, he had no ready means to confirm that the DHC-8 was in controlled airspace. This was not in accordance with the criteria for traffic assessment specified in MATS chapter 3, which stated that "..shall be passed traffic when an assessment of data indicates the possibility of a confliction, with the overriding spirit being, when in doubt advise".
At 1551.22 the crew of the C130 reported to FS3 that the aircraft had left FL130. The radar controller advised the crew of the DHC-8 that the C130 was directly ahead of them at 3 NM and suggested that they should return to the FS frequency. At 1551.43, the crew reported that they had descended to FL120 to establish 1,000 ft vertical separation with the C130 and returned to the FS3 frequency to attempt to contact the crew of the C130.
The radar controller was unsure of the intentions of the crew of the C130: consequently, he believed it was better to have the crew of the DHC-8 return to the FS3 frequency. Also, because of their proximity to each other, and because both aircraft were in or about to enter non-controlled airspace, with limited time available to relay advice, he believed that any attempt to give avoidance instructions at that stage could have resulted in a higher risk of collision. The final transmission from the radar controller to the crew of the DHC-8 was that the C130 was 1 NM ahead at FL120. The crew may not have heard this transmission as they were communicating with the crew of the C130 on the FS3 frequency.
At 1551.53, the crew of the DHC-8 was able to communicate with the crew of the C130 and they established that the C130 had just passed them. The crew of the DHC-8 reported that they saw the C130 pass to the left of their aircraft. The aircraft passed at FL120 within approximately 400 m of each other, in the cloud tops.