The signal box operator's screen showed the train sitting between signals 37 and 39. The operator planned to use signal 39 to hold the train until another inbound train was clear, the report said.
However, when the driver changed driving ends, signal 39 was just behind the driving cab. When the signaller authorised the driver to proceed back to Signal 39, the driver moved the train forward in search of the signal, towards the same set of crossover points as the other inbound train.
The signaller spotted the mix up on their screen and called the driver to stop the train. The train stopped about 120m past the red signal. There was no collision and no injuries.
TAIC found the situation was created because the signalling system was giving information to the signaller that did not match what was happening in the field.
The separation between the signal and the insulated joint had not been identified as an issue when the lines in the area were modified and upgraded in 2010.
TAIC said the issue had been identified in a previous inquiry as created a "heightened risk of trains colliding" as they approached Wellington Station, because limited space made the track layout congested.
It said a number of reasonable measures had not been taken to further reduce the risk of collisions.
Recommendations to increase safety were made in the last report, so no new recommendations were made this time.
TAIC said the key safety lesson from the latest incident was that "trains should not be unnecessarily authorised to proceed up to red signals in congested areas, because the reduced safety margins in these areas increase the risk of a collision if a signal is passed at danger".