the way they interpret it is that it is designed so that those not operating under an AoC cannot take business away from legitimate businesses
I would have thought that this is less about threat to certified businesses than it is about risk to the consumer. As the regulator, CASA has a responsibility to the travelling public to ensure a standard of flight proficiency and training, (as well as aircraft maintenance standards etc.) If the guy doesn't hold a CPL, then he presents a greater risk to a public person, who may or may not be aware of the degree of training this pilot has undergone.
Additionally, where is he getting the aircraft? If he is effectively doing charter operations using a aircraft operating under an AOC that does not specify charter ops, again he is circumventing the risk assessment process that would be applied if he were to do the same flight under an AOC. This has flow on consequences in terms of liability for insurance purposes if the aircraft owner/operator is not aware of what the pilot is actually doing.
Any legal types care to offer an opinion as to what would happen here in any civil case arising from injury sustained by a paying passenger???
Way too close to the sun for my liking,
Icarus