The B737 was inbound to Coolangatta, heading 340 and on descent to 7,000 ft. This heading would take the aircraft across the extended centreline of runway 14. The SA226 had been cleared to climb to 5,000 ft on runway heading after takeoff from runway 14. The B737 was subsequently cleared to 2,000 ft to join right downwind for runway 14. Shortly after the SA226 levelled at 5,000 ft, the B737 passed in the opposite direction approximately 1.5 NM east and 500 ft below the SA226. The separation standard required was 3 NM horizontal/1000 ft vertical separation. The responsible controller was under a moderate to high workload in the period leading up to the incident. In addition to other departing and arriving traffic, there was traffic to the north of Coolangatta being handed off to Brisbane and a parachuting aircraft awaiting run-in for a drop near the aerodrome. It appears that the high workload and other traffic considerations distracted the controller to the extent that he forgot about the SA226, at least temporarily. The appropriate technique would have been to provide separation assurance by way of the departure clearance. The controller indicated that he may have been suffering a degree of fatigue at the time of the incident and this may have affected his performance.