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The Skylane pilot was inside controlled airspace before the air traffic control clearance was issued. Had the controller made a positive instruction for the pilot to remain outside controlled airspace, or told the pilot to standby for a clearance, the pilot may have levelled at 1,500 ft while awaiting the clearance. Such an action would have provided greater than the minimum separation of 500 ft that was required between an aircraft in controlled airspace and an aircraft outside controlled airspace.

Although the Skylane was fitted with a transponder, the pilot did not have the transponder operating. If the transponder had been operating on code 1200 or any other code, the TCAS in the B737 would have alerted the crew to the proximity of the Skylane. Also, the Tabletop controller, although not controlling the two aircraft, may have received a short-term conflict alert on the radar display, which could have been relayed to the aerodrome controller alerting him to their close proximity.

The aerodrome controller was required to set up a separation standard between the two aircraft before issuing the Skylane pilot with an air traffic control clearance, unless the clearance incorporated a requirement that ensured separation. Because vertical separation was not available due to the B737 being on an instrument approach, some form of lateral separation was required.

The arc of the 5 NM radius of Shute Harbour and the inbound radial of the runway 14 VOR/DME approach overlapped each other. As a result, there was no form of lateral separation between the aircraft when the clearance was issued.

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