Airservices v Canadian Airlines

Airservices Australia (Airservices) sought to recover from Canadian Airlines Ltd (Canadian Airlines) the cost of air navigation services provided to Canadian Airlines' aircraft during the period 1 July 1997 to 30 June 1999. The dispute concerned whether the *Air Services Act 1995* (Cth) (the Act) and the *Air Services Regulations 1995* (Cth) (the Regulations) imposed a liability on Canadian Airlines to pay for these services, or whether the liability rested with the Commonwealth. The matter was heard by the High Court of Australia.

The High Court was required to determine whether the charging provisions of the Act and Regulations, specifically sections 70 and 71 of the Act and regulation 3.01 of the Regulations, created a personal liability on the part of an aircraft operator to pay for air navigation services, or whether they merely established a mechanism for the Commonwealth to recover costs from the Consolidated Revenue Fund. A further issue was whether, if a personal liability did exist, it was discharged by the operation of section 139 of the Act, which provided that the Commonwealth was liable to pay Airservices for the provision of services.

The Court held that the Act and Regulations did not create a personal liability on the part of aircraft operators to pay for air navigation services. Instead, the scheme of the legislation contemplated that the Commonwealth would be liable to pay Airservices for the provision of these services, and that Airservices would then recover its costs from the Commonwealth. The Court reasoned that the language of the charging provisions did not establish a direct contractual or statutory debt owed by the operator to Airservices. Section 139 of the Act was interpreted as confirming the Commonwealth's obligation to fund Airservices, rather than creating a separate liability for operators.

The High Court therefore found in favour of Canadian Airlines, dismissing Airservices' claim.