Circumstances VH-OXC was proceeding on a flight from Williamtown to Coffs Harbour at 9,000 ft outside controlled airspace [OCTA]. The pilot made all position reports as required and was estimating Coffs Harbour at 0734 hours EST. Sydney Flight Service 5 [FIS 5] co-ordinated these details with Coffs Harbour air traffic control [ATC] and at 0724 hours the pilot contacted Coffs Harbour ATC prior to the control area [CTA] boundary for an airways clearance. ATC issued the clearance for VH-OXC to enter CTA on descent to 5,000 ft. VH-CMR was proceeding on a flight from Williamtown to Coffs Harbour and was maintaining Flight Level [FL] 130 in CTA. The crew used a standard flight plan and the time intervals indicated an estimated time of arrival [ETA] over Taree of 0710 hours and Coffs Harbour 0744 hours. Sydney Sector 2 [ATC] identified VH-CMR 20 NM south of Taree and therefore there was no requirement for the crew to report over Taree. The aircraft passed Taree at 0707 hours. Sector 2 then co-ordinated VH-CMR with Coffs Harbour ATC and gave the ETA as 0744 hours as per the flight plan times. The crew of VH-CMR elected to descend prior to the Coffs Harbour CTA steps and this necessitated flight OCTA for approximately three minutes. Sector 2 therefore co-ordinated the aircraft's position with FIS 5 giving the Taree position as 0707 hours, but again gave the ETA Coffs Harbour as 0744 hours. The crew of VH-CMR reported leaving FL 130 to Sector 2 and were instructed to contact area frequency at that time. However they elected not to call on area frequency as they only had approximately three minutes OCTA and would need to contact Coffs Harbour ATC for a clearance prior to entry into the CTA step. The Sydney Flight Service Officer [FSO] took the position report on VH-CMR from Sector 2 and wrote the information on the flight strip, but did not make a check of the time interval from Taree to Coffs Harbour or on the difference in the ETA and the actual time at Taree. This resulted in the FSO having a ten minute time difference between VH-OXC and VH-CMR at Coffs Harbour when in fact the information received indicated a time difference of seven minutes. The time standard for passing traffic is, within ten minutes at any particular point and the FSO decided that as there was ten minutes at Coffs Harbour there was no need to pass traffic to the aircraft. At 0725 hours VH-CMR contacted Coffs Harbour ATC at 35 NM [the CTA step] and on descent through 8,000 ft to request an airways clearance. The controller immediately took action to establish vertical separation but this was not achieved until 0727 hours. During this two minute period the vertical difference between the two aircraft reduced to a minimum of 100 ft and the horizontal difference to a minimum of 2.3 NM. As VH-CMR had waited until the exact location of the CTA step to contact Coffs Harbour ATC, the controller was unable to establish separation until after both aircraft had entered the CTA step and therefore a breakdown in separation occurred. Significant Factors 1. The crew of VH-CMR contacted Coffs Harbour ATC at the CTA boundary and not prior to that boundary. 2. The crew of VH-CMR entered the CTA without an ATC clearance.