The court found that the risk of an accident occurring when flying a light aircraft was low – but that when an accident does occur there is a real risk of significant physical harm. And so the court concluded that flying in a light aircraft is a dangerous recreational activity.
Yes it looks like the court weighed more heavily on the consequence of the risk rather than the likelihood.
Interesting as in the RAAF system, a catastrophic consequence (multiple fatalities, etc) combined with the lowest likelihood comes out at low risk. It seems here the court has interpreted the "inherent risk" of flying makes it a dangerous activity for the purposes of compo.
Interesting how far it would extend to other activities that are low risk but have a worst-case-scenario outcome.