VH-BPZ was en route from Wynyard to Phillip Island, cruising at 8000 feet and estimating the Marsh reporting point at 0555 UTC. VH-OZT was en route from Moorabbin to Wynyard, cruising at 9000 feet and also estimating Marsh at 0555 UTC. At 0551 UTC the pilot of VH-OZT called Melbourne Flight Service requesting traffic for descent to Wynyard. VH-OZT was advised of traffic (VH-EXC) inbound to Wynyard from the south. About 15 seconds later, the pilot of VH-BPZ asked flight service about "the Navajo for Wynyard". Flight service then gave traffic information to BPZ and OZT on each other's locations/estimates. The two aircraft then effected mutual separation. The investigation determined that the flight service workload was heavy at the time of the occurrence. Both western sectors were combined at one console but the traffic was confined to only one of the sectors. The console was staffed by two Flight Service Officers, one acting as a co-ordinator and the other as a traffic information officer. Prior to the occurrence, the traffic information officer had considered the traffic implications of VH-BPZ and VH-OZT but had concluded that they would have 1000 feet vertical separation at the time of passing. Therefore, when VH-OZT requested traffic for descent, the officer concentrated on traffic in the immediate Wynyard area and overlooked VH-BPZ. Significant Factors The following factors were considered relevant to the development of the occurrence: 1. The flight service workload in the sector of the occurrence was heavy at the time of the occurrence. 2. The traffic information officer had previously assessed the traffic situation of the two aircraft involved and had dismissed them as traffic for each other on the basis of 1000 feet vertical separation. A reassessment was not made when the pilot of VH-OZT requested traffic for descent.