But as I keep saying: It appears the neighbour is not a party to the litigation. Unless the neighbour is a party, the question whether the neighbour’s disclosure to CASA is protected by qualified privilege is academic.
As to the disclosure by CASA to the employer? You may be right.
But we can all confidently bet leftie that CASA will invoke Germanwings and ‘safety’ as the justification - indeed, CASA already has. And we can all confidently bet leftie that CASA knows that rationality goes out the window, closely followed by concerns about trivia like natural justice and an individual’s career and reputation, when punters contemplate Germanwings. There can no price on aviation ‘safety’....
I anticipate CASA will use some exquisite sophistry to draw a causal link between ‘safety’ and the disclosure to the employer. All CASA needs to do is create enough fear of another Germanwings and they’d get away with putting up posters in airports with your picture and a sign saying “Warning: This pilot might be suicidal”.
Don’t get me wrong: If I were a religious person, I’d be praying to every deity for a win for the pilot. But, like religion, aviation safety regulation in Australia is about fear and intuition and magic, not objective risks and causally beneficial mitigations of those risks.