TRADE PRACTICES ACT 1974 No. 51, 1974 - SECT 61 Pyramid selling.

TRADE PRACTICES ACT 1974 No. 51, 1974 - SECT 61

61. (1) A corporation contravenes this section if-

   (a)  the corporation is the promoter of, or (if there are more than one)
        one of the promoters of, or is a participant in, a trading scheme to
        which this section applies; and

   (b)  a person who is a participant in that trading scheme, or has applied
        or been invited to become a participant in that trading scheme, makes
        any payment to or for the benefit of the corporation, being a payment
        that he is induced to make by reason that the prospect is held out to
        him of receiving payments or other benefits in respect of the
        introduction (whether by himself or by another person) of other
        persons who become participants in that trading scheme.

(2) A corporation also contravenes this section if-

   (a)  the corporation is the promoter of, or (if there are more than one)
        one of the promoters of, is a participant in, or is otherwise acting
        in accordance with, a trading scheme to which this section applies;
        and

   (b)  the corporation, by holding out to any person the prospect of
        receiving payments or other benefits in respect of the introduction
        (whether by himself or by another person) of other persons who become
        participants in that trading scheme, attempts to induce that person-

        (i)    if he is already a participant in that trading scheme, to make
               any payment to or for the benefit of the promoter or any of the
               promoters or to or for the benefit of a participant in that
               trading scheme; or

        (ii)   if he is not already a participant in that trading scheme, to
               become such a participant and to make a payment of a kind
               mentioned in sub-paragraph (i).

(3) For the purposes of sub-section (1) or (2)-

   (a)  a prospect of a kind mentioned in that sub-section shall be taken to
        be held out to a person whether it is held out so as to confer on him
        a legally enforceable right or not;

   (b)  in determining whether an inducement or attempt to induce is made by
        holding out a prospect of a kind mentioned in that sub-section, it is
        sufficient if a prospect of that kind constitutes or would constitute
        a substantial part of the inducement; and

   (c)  any reference to the making of a payment to or for the benefit of a
        person shall be construed as including the making of a payment partly
        to or for the benefit of that person and partly to or for the benefit
        of one or more other persons.

(4) For the purposes of this section, a scheme is a trading scheme to which
this section applies if the scheme includes the following elements:-

   (a)  goods or services, or both, are to be provided by the person promoting
the scheme (in this section referred to as the "promoter") or, in the case of
a scheme promoted by two or more persons acting in concert (in this section
referred to as the "promoters"), are to be provided by one or more of those
persons; and

   (b)  the goods or services so provided are to be supplied to or for other
        persons under transactions effected by persons (other than the
        promoter or any of the promoters) who participate in the scheme (each
        of whom is in this
section referred to as a "participant").

(5) For the purposes of sub-section (4)-

   (a)  a scheme shall be taken to include the element referred to in
        paragraph (4) (b) whether the transactions referred to in that
        paragraph are to be effected by participants in the capacity of
        servants or agents of the promoter or of one of the promoters or in
        any other capacity;

   (b)  a scheme includes any arrangements made in connexion with the carrying
        on of a business, whether those arrangements are made or recorded
        wholly or partly in writing or not; and

   (c)  any reference to the provision of goods or services by a person shall
        be construed as including a reference to the provision of goods or
        services under arrangements to which that person is a party.