Australian Competition and Consumer Commission v Worldplay Services Pty Ltd

The Australian Competition and Consumer Commission (ACCC) brought proceedings against Worldplay Services Pty Ltd (WPS) and World Games Inc Pty Ltd (WGI) for alleged breaches of the Trade Practices Act 1974 (Cth) concerning pyramid selling schemes. The ACCC claimed that WPS and WGI engaged in a scheme where participants were induced by the prospect of earning money through recruiting others, which contravened section 65AAC of the Act. The court had to determine whether the respondents participated in such a scheme and if Mr. Kennedy was knowingly involved.

The court addressed several preliminary issues before tackling the main questions. One key issue was the territorial scope of the Trade Practices Act in relation to schemes operating outside Australia. The respondents argued that the Act should not apply to schemes that did not operate within Australia's borders. However, the court found that the conduct of the respondents took place within Australia, despite the scheme operating outside its borders. Therefore, the territorial scope of the Act did not need to be resolved.

The court concluded that WPS and WGI participated in a pyramid selling scheme and Mr. Kennedy was knowingly involved. Consequently, the court issued declarations and injunctions prohibiting the respondents from participating in or being involved in similar schemes. Additionally, the court ordered the respondents to pay the ACCC's costs. The decision underscored that the Trade Practices Act applies to Australian entities engaging in conduct within Australia, regardless of where the scheme operates.