"Very hard to tell the difference between the cloud and the ice"
According to Vette, Capt Collins got his wings in 1954 and left the RNZAF in 1958, while stationed at Wigram, Christchurch. In 1956 the RNZAF organised an Antarctic flight to support Hillary's expedition, which presumably departed from Wigram. Even if Collins wasn't on that trip, the RNZAF base that he was attached to would have accumulated some institutional knowledge of sector whiteout. Further, there is no reason why the same thing can't occur in the Southern Alps, not far from Wigram.
The point is that Collins may well have known about sector whiteout, hence the comment he made at 18000 feet. This makes his spur-of-the-moment decision to go down through that hole and fly VMC, thereby putting himself between the cloud and the ice, even more careless. The letters VMC do not sit easily with "very hard to tell the difference between the cloud and the ice".