The death of a Victorian soldier in a "shambolic" live-fire exercise south of Darwin was partly the result of a "long-held mindset" against rehearsals for combat-like operations, a coroner has found.

The Northern Territory coroner today handed down his findings into the death of Private Jason Challis, 25, who was shot during Exercise Tigers Run at the Mount Bundy Station training facility in May 2017.

The exercise was conducted without a prior walk-through or "dry-fire" (without ammunition) or blank ammunition rehearsal for Private Challis' section, as was required by Army training doctrine.

Coroner Greg Cavenagh said it was "unimaginable" that the soldier would have been in an out-of-sight position in the line of fire if the correct procedures had been followed.

Sorry, this video has expired A reconstruction of the shooting incident during Exercise Tigers Run

"The failure to follow doctrine was not the failure of one or two or even a small group of individuals," the coroner wrote in his findings.

"It was not a mistake, forgetfulness or momentary inattention.

"It was a failure by the whole chain of command — it was a 'systemic failure' in the true sense of that phrase."

He said the evidence showed there was difficulty within the Army in changing a "long-held mindset" that live-fire practice should emulate actual combat conditions, without a rehearsal on the actual range, despite new requirements sparked by a previous fatal accident.

Call to change attitudes

The inquest heard Private Challis was shot while standing behind a plywood wall in an urban attack exercise in a setting meant to resemble a village.

His unit, Bravo Company of the 5th Battalion Royal Australian Regiment, was described as a "brand new section" in need of considerable training.

The coroner said he was "surprised" that the Acting Commanding Officer of the company was still qualified to supervise the exercise despite an outdated level of training.

The officer was not aware of a new requirement for a dry fire rehearsal to be followed by a blank fire rehearsal before live-fire exercises could take place.

The coroner said there seemed to have been little training or education in the Army about this updated doctrine.

He also noted that at the time the Army had failed to adopt a recommendation requiring walk-throughs of an exercise area.

That recommendation had been made after the fatal shooting of Lance Corporal Mason Edwards during a live-fire exercise at the Cultana training area in 2009.

Judge Cavenagh said there appeared to an "unwillingness to confront" the reasons for the failure to make those changes.

"It is obviously a difficult balance for Army, but I encourage them to resolve the competing requirements between safe training and dynamic training (or testing) in an explicit manner," he wrote.

The family of Jason Challis arriving at the Darwin court house last year, ahead of an inquest into his death. ( ABC News: Jason Matthews )

'A catastrophic system failure'

While Judge Cavenagh praised the individual soldiers who gave evidence at the inquest, he said that the Army had sought to "downplay the characterisation of the facts" when it rejected the characterisation of the exercise as "shambolic".

And he said the Army's emphasis on personnel error was misguided.

"In this case it was not simply 'human factors' that intervened," he said.

"There was a catastrophic systemic failure."

The coroner recommended that the Army "resolve the confusion" about what rehearsals are mandatorily required prior to live-fire exercises.

And he said "no-go areas" behind concealed targets should be marked on the walls containing them — a recommendation that was also made after Lance Corporal Edwards' death.

A spokesperson for the Defence Department said it was considering the coroner's report.

An inquiry by Comcare into any breaches of the Work Health and Safety Act is still underway.