Ansett Australia Limited (subject to a deed of company arrangement) v Travel Software Solutions Pty Ltd

In the case of Ansett Australia Limited (subject to a deed of company arrangement) versus Travel Software Solutions Pty Ltd, the Federal Court of Australia was tasked with resolving a dispute regarding the set-off of debts between the two parties. Ansett Australia, under a deed of company arrangement, sought to offset its debt to Travel Software Solutions against a claim for damages held by Travel Software Solutions. The crux of the matter was whether the debts could be set off under the Corporations Act 2001 (Cth), specifically section 553C, which pertains to mutual dealings between the parties.

The legal issues before the court involved determining whether the debts were mutual dealings as required by the statute and whether a future chose in action could be assigned under the agreement between the parties. Additionally, the court had to interpret the meaning of "fund" under the rule in Cherry v. Boultbee, considering whether the undistributed profits of a solvent company while it was a going concern could be considered a fund.

The court held that the debts were not mutual dealings as defined by the Corporations Act, and thus could not be offset against each other. It was determined that the agreement between the parties did not constitute an assignment of a future debt. Furthermore, the court found that the undistributed profits of a solvent company operating as a going concern did not constitute a "fund" within the meaning of the rule in Cherry v. Boultbee. Consequently, the claim for set-off was dismissed.

The court's final order was that Ansett Australia Limited was not entitled to offset its debt to Travel Software Solutions against the damages claim, and the set-off was not permitted under the applicable law.