While outside controlled airspace south of Melbourne city at 2,000 ft, the pilot of DC3, VH-OVM, requested an airways clearance for orbits of the central business district. After a short delay due to ILS traffic, the Essendon tower controller issued the DC3 with a clearance and provided traffic information on a PA28, VH-WUB, also at 2,000 ft.
The pilot of the PA28 called Essendon tower completing a left orbit of the central business district and requested a clearance direct to Point Ormond. His clearance was conditional on remaining clear of the DC3 which he believed he had in sight. Shortly thereafter, the pilot of the DC3 reported a 200 metre near miss with the PA28.
The PA 28 pilot explained that at the time he was asked by the tower controller if he had the DC3 sighted, he saw an aircraft some distance off to the right, which soon passed abeam. He presumed this was the DC3. Believing that DC3 traffic had passed, he was shocked to see aircraft navigation lights directly ahead. Immediately he altered heading slightly to the right but as the navigation lights continued to approach at about the same altitude, he banked steeply right and descended to 1,700 ft.
The PA28 pilot subsequently advised that judging distance to the head-on DC3 lights was difficult because of the background blackness of Port Phillip Bay. For the DC3 pilot, the near miss was so sudden he did not achieve any evasive action. Until the PA28 banked steeply, the DC3 pilot did not see it, probably because the PA28 navigation lights merged with the myriad of background lights of Melbourne suburbia.
In hindsight, the PA28 pilot believes each aircraft would have been more easily sighted if aircraft landing lights were on.