A young soldier was fatally shot in the head two minutes after a live-fire exercise was restarted after being paused due to safety concerns.
Victorian soldier Private Jason Challis, 25, died after he was shot in 2017 at the ADF's Mount Bundey training area, about 120km southeast of Darwin.
The Defence department has pleaded guilty in the Northern Territory Local Court to failing to comply with its health and safety duty.
Pte Challis was accidentally shot in the head and knee during an urban warfare exercise in a mock town made of plywood and hessian.
Safety procedures should have protected the much-loved 5th Battalion rifleman, who had joined the ADF 10 months earlier.
But no one had noticed he'd wasn't with his team as it entered the makeshift structure and was instead crouching behind a target when two soldiers fired on it.
The exercise had been stopped two minutes earlier when a supervisor noticed Pte Challis's group had entered a "danger zone" incorrectly.
The soldiers were ordered to reset but Pte Challis stayed in the zone.
Two safety supervisors, a corporal, and the officer in charge didn't notice he hadn't moved.
The court heard "vagaries of the human factor" were a key cause of the incident, along with "inadequate compliance" to, a "deliberate disregard" for and a "momentary lapse" from procedures.
But the primary failures were that the soldier's corporal hadn't ordered the group to do a practice run before the exercise and this wasn't picked up by commanders.
The danger zone or possible angles or arcs of fire where Pte Challis was positioned were also not properly marked.
Prosecutor Jennifer Single SC said it was a significant departure from the acceptable standard.
"This is a serious offence," she said.
It wasn't a case of one member not complying with the safety procedures, there were numerous members that didn't, which shows a systemic failure, she said.
Ms Single was critical of Defence, saying it hadn't acknowledged there was policy and that it failed because no one ensured it was being complied with.
"What this prosecution is about is that the policies existed ... but there were no mechanisms to ensure that those policies were actually complied with," she said.
Judge Elisabeth Armitage said the breach had put every soldier involved in the exercise at risk.
"With all of these mechanisms in place and a failure for any of them to work, it seems to point to a catastrophic failure to comply with the work health and safety duties," she said.
Earlier, Major General Matthew Pearse said Pte Challis had a right to expect a safe working environment.
"On behalf of Defence, I apologise unreservedly for our failure. This is not something we ever want to repeat," he said.
Defence's lawyer Fiona McLeod SC said it was a "terrible and avoidable tragedy" that shouldn't have happened and was deeply regretted by Defence.
Four investigations by the NT coroner, NSW police forensics unit and the ADF have not found why Pte Challis became separated from his group.
Pte Challis's father, John Challis, told the court his son was a "true Aussie digger", labelling his death a "tragic f*** up"."
"Jason died serving his country," he said.
The ADF investigated nine serving members closely linked to the incident. One was sacked and six others were reprimanded.
The army has since rewritten and bolstered its safety and training procedures and is in the process of improving its training infrastructure.
It will also pay Pte Callis's family reparations and is likely to be fined. The maximum penalty is $1.5 million.
The case will return to court on June 18.