The Boeing B737-800 (B737) was cleared to Melbourne via the Sydney RWY 34R MARUB THREE standard instrument departure (SID) to 5,000 ft. The Boeing B767-338ER (B767) was inbound to Sydney from Auckland, NZ, and had been cleared to descend to 6,000 ft with a vector to a right downwind leg for RWY 34R. As the aircraft approached each other 12 NM east of Sydney, an infringement of the radar separation standard occurred.
The pilot in command of the B737 was the handling pilot for the sector and was manually flying the aircraft while tracking via the SID. He had recently completed retraining on the aircraft after having not flown the type for 10 years.
After take-off, the B737 entered cloud and encountered turbulence as it climbed through 3,500 ft. The pilot in command was monitoring the aircraft's weather radar and stated that he became distracted while assessing the meteorological conditions. Although the co-pilot gave the 1,000 ft to assigned altitude call at 4,000 ft, he was also observing the weather situation and did not monitor the flight instruments as the aircraft approached the assigned altitude. The B737 continued to climb above 5,000 ft and reached 5,700 ft before the pilot in command descended the aircraft back to the assigned level. During the descent the aircraft's traffic alert and collision avoidance system issued a Traffic Alert.
The departure controller issued a turn instruction to the crew of the B737 for avoidance action and an evasive turn instruction to the crew of the B767, in addition to providing traffic information on the B737. Recorded radar data indicated that lateral separation between the aircraft reduced to 2.8 NM with a vertical separation of 900 ft. The required radar separation standard was 3 NM laterally or 1,000 ft vertically.