defendable in front of the Regulator (not CASA) under those Transport Safety Regs specifically 4.21B.
You mean Aviation Transport Security Regs
Given that details have been reported in the news I would be surprised if the NZ CAA and Aus Dept of Home Affairs isn't looking at this already.
Part 108 of the NZ regs seems a little more relaxed than ours although it didn't apply in this case.
108.53(b)(7)
the air operator and the pilot-in-command are to assess the risk and decide whether a passenger’s baggage that is on board an aircraft is to be carried on the flight if the passenger has failed to board the aircraft