Airbus Industrie A320-211 , VH-HYF

The crew of an Airbus A320, operating under instrument flight
rules (IFR), was cleared to descend to 4,000 ft on a BROOK TWO
standard arrival route. The approach radar controller advised the
A320 crew of two other aircraft, operating outside controlled
airspace, on the reciprocal track to their aircraft. The controller
reported a primary radar return only on the first aircraft and that
the second aircraft was indicating an unverified Mode C altitude of
3,500 ft. The lower limit of controlled airspace in the area was
3,500 ft and was available for use by aircraft outside controlled
airspace.

The pilot of the A320 levelled the aircraft at 4,300 ft and
maintained that altitude until both pilots sighted the first
aircraft. The A320 crew then received a Traffic Alert and Collision
Avoidance System (TCAS) traffic advisory alert on the second
aircraft. The TCAS indicated that the second aircraft was 800 ft
below the A320. The crew then sighted that aircraft.

The minimum vertical separation requirement between an IFR
aircraft in controlled airspace, and an aircraft operating under
visual flight rules outside controlled airspace is 500ft. This
spacing may on occasions be insufficient to prevent activation of a
TCAS alert, or to provide adequate wake turbulence separation
between aircraft.