International Air Transport Association v Ansett Australia Holdings Ltd

The parties to this appeal were the International Air Transport Association (IATA) and Ansett Australia Holdings Ltd (Ansett). The dispute concerned the effect of IATA's Clearing House Regulations on the financial relationship between IATA and Ansett, particularly in light of Ansett's subsequent voluntary administration. The matter was heard by the High Court of Australia.

The legal issues before the High Court included whether the IATA Regulations meant that IATA was the sole creditor of Ansett to the exclusion of other participating airlines, and whether the operation of Part 5.3A of the *Corporations Act 2001* (Cth) or public policy required Ansett's entire estate to be available for distribution to all creditors, thereby invalidating the effect of the Regulations. The court also considered the relationship between contractual rights under the Regulations and the operation of a Deed of Company Arrangement under Part 5.3A, and whether the Regulations were repugnant to such a Deed.

The High Court reasoned that the IATA Clearing House system, as established by the Regulations, operated to net off debts and credits between participating airlines, with IATA acting as an intermediary. Payments were made to or from the Clearing House, not directly between airlines. The court distinguished the present case from *British Eagle International Air Lines Ltd v Compagnie Nationale Air France*, finding that the Regulations, properly construed, did not circumvent the operation of the *Corporations Act* or a Deed of Company Arrangement. The court held that the contractual rights and obligations under the Regulations were not invalidated by Ansett's administration or the subsequent Deed.

The High Court allowed the appeals, setting aside the orders of the Court of Appeal of the Supreme Court of Victoria. The effect was that the appeal to the Court of Appeal was otherwise dismissed, and IATA was ordered to pay Ansett's costs of the appeal to the High Court.