Pyramid Selling Schemes (Elimination) Act 1973 (Qld)

791 ANNO VICESIMO SECUNDO ELIZA ET AE SECUNDAE . EGINAE No 8 7 of 1973 An Act to provide for the e l i m i n ation of pyra m id selling sche m es [ASSENTED TO 20TH DECEMBER, 1973] BE IT ENACTED by the Queen's Most Excellent Majesty, by and with the advice and consent of the Legislative Assembly of Queensland in Parliament assembled , and by the authority of the same , as follows:- PART I-PRELIMINARY 1. Short title . This Act may be cited as the Pyramid Selling Schemes (Elimination)- Act 1973. 2. Com m encement . This Act shall come into operation on a date to be appointed by Proclamation. 3. Arrangement of Act. This Act is arranged as follows:- PART I-PRELIMINARY (ss. 1-5);. PART II -- PYRAMID SELLING SCHEMES ( ss. 6-8); PART 111--PROHIBITION ORDERS ( ss. 9-17); PART IV--MISCELLANEOUS PROVISIONS (SS. 18-29).

792 Pyramid Selling Schemes (Elimination) Act 1973, No. 87 4. Definitions. (1) In this Act, save where a contrary intention appears- committee " means the committee constituted under this Act called the Pyramid Selling Schemes Elimination Committee; " Minister " means the Minister for Justice and Attorney-General or other Minister of the Crown for the time being charged with the administration of this Act; and includes any person for the time being performing the duties of the Minister; " participant " means a person who participates in a trading scheme otherwise than as a promoter; " promoter " means, in relation to a trading scheme- (a) a person who promotes the scheme; (b) where two or more persons together promote the scheme, each of those persons; " pyramid selling scheme " means a trading scheme under which- (a) goods or services, or both, are provided or are to be provided by any person; (b) the goods or services so provided are supplied or are to be supplied to or for another person by participants in the scheme (whether or not as agents or servants of a promoter of the scheme); (c) all or a substantial number of transactions or negotiations for the supply of goods or services under the scheme to other persons are effected or take place or are to be effected or to take place at a place other than a place of business of a promoter of the scheme or of the participant supplying the goods or services; and (d) the prospect is held out to a participant in the scheme (whether or not so as to confer a legally enforceable right) of receiving payments or other benefits in respect of- (i) the introduction (whether or not by him) of other persons who become participants in the scheme; (ii) the promotion, transfer or other change of status of participants in the scheme; (iii) the supply of goods to other participants in the scheme; (iv) the provision of training facilities or other services for other participants in the scheme; or (v) transactions effected by other participants in the scheme whereby goods or services are or are to be supplied to or for other persons; " services " includes rights or privileges and any intangible property; " trading scheme " includes arrangements (whether or not recorded in writing) made in connexion with the carrying on of a business. (2) For the purposes of this Act- (a) in determining whether any premises are a place of business of a promoter of or a participant in a trading scheme no account shall be taken of transactions effected or to be effected or of negotiations taken place or to take place at those premises under the scheme;

Pyramid Selling Schemes (Elimination) Act 1973, No. 87 793 (b) any reference in this Act to the provision or supply of goods or services by any person includes a reference to the provision or, as the case may be, supply of goods or services under arrangements to which that person is a party. 5. Mere purchasers not thereby participants in scheme . The purchase or proposed purchase of goods or services from a promoter of or a participant in a pyramid selling scheme does not, of itself, constitute participation or proposed participation in the scheme and any person who so purchases any goods or services does not, by that fact alone, become a participant in the scheme. PART 11-PYRAMID SELLING SCHEMES 6. Offences concerning pyramid selling scheme . (1) A person shall not- (a) promote a pyramid selling scheme; (b) grant or purport to grant to another person a right (whether or not legally enforceable) to participate in a pyramid selling scheme; (c) offer another person a right (whether or not legally enforceable) to participate in a pyramid selling scheme; or (d) invite or induce another person to participate or to seek to participate in a pyramid selling scheme, whether he makes the promotion, grant, offer, invitation or inducement himself or by an agent or as an agent of another person. Penalty: $5 000 or imprisonment for one year or both. (2) Where a person who is a participant in a pyramid selling scheme or who has applied or proposes or has been invited to become a participant in a pyramid selling scheme- (a) makes or agrees to make a payment to or for the benefit of a promoter of the scheme, or to or for the benefit of a participant in the scheme; and (b) is induced to make or to agree to make that payment or any part of that payment by reason that the prospect is held out to him (whether or not as a legally enforceable right) of receiving payments or other benefits in respect of the introduction (whether or not by him) of other persons who become participants in the scheme, any person to whom or for whose benefit the payment is made or is agreed to be made commits an offence against this Act. Penalty: $2 000 or imprisonment for six months or both. (3) Any person who, for the purposes of a pyramid selling scheme, by holding out to another person (whether or not as a legally enforceable right) the prospect of receiving payments or other benefits in respect of the introduction (whether or not by that other person) of other persons who become participants in the scheme induces or attempts to induce that other person- (a) if he is a participant in the scheme, to make or agree to make a payment to or for the benefit of a promoter of the scheme or to or for the benefit of a participant in the scheme; or

794 Pyramid Selling Schemes (Elimination ) Act 1973, No. 87 (b) if he is not a participant in the scheme, to become a participant therein and to make or agree to make a payment to or for the benefit of a promoter of the scheme or to or for the benefit of a participant in the scheme, commits an offence against this Act. Penalty: $2 000 or imprisonment for six months or both. 7. Definitive provisions concerning offences against s. 6. (1) Where a prospect referred to in subsection (2) or (3) of section 6 is held out, it is an inducement (for the purposes of those subsections) or, as the case may be, an attempt to induce (for the purposes of that subsection (3)) notwithstanding that the prospect did not or would not have constituted the whole of the inducement if the prospect constituted or would have constituted a part of the inducement. (2) A reference in section 6 to the making of a payment to or for the benefit of a person includes reference to the making of a payment partly to or for the benefit of one person and partly to or for the benefit of one or more other persons. 8. Offences by other promoters . (1) Where an offence defined in section 6 is committed by a person who is a promoter of a pyramid selling scheme, any other person who is a promoter of the scheme shall be taken to have committed a like offence and he may be charged with that offence (either jointly with such first-mentioned person or separately) and punished accordingly. (2) Where a person is charged with an offence pursuant to subsection (1) it shall be a defence to prove that the contravention that constitutes the offence was committed without his consent or connivance and that by using due diligence he could not have prevented its commission. PART 111-PROHIBITION ORDERS 9. Constitution of committee . (1) For the purposes of this Act there shall be constituted from time to time a committee to be called the Pyramid Selling-Schemes Elimination Committee. (2) The committee shall be composed of the persons who for the time being constitute the Corporate Affairs Advisory Committee constituted pursuant to the Companies Act 1961-1972. (3) The person who for the time being is chairman of the Corporate Affairs Advisory Committee shall be chairman of the Pyramid Selling Schemes Elimination Committee. 10. Function of committee . (I) It is the function of the committee to do all such acts and things as are, in its opinion, necessary or desirable to eliminate in Queensland, as far as is practicable, pyramid selling schemes and to that end the committee shall-- (a) at the request of the Minister, investigate and examine any trading scheme for the purpose of determining whether the scheme is a pyramid selling scheme; (b) furnish to the Minister, when and as often as he requires, a report generally or, as the Minister requires, information on matters concerned with the function of the committee under this Act;

Pyramid. Selling Schemes (Elimination ) Act 1973, No. 87 795 (c) conduct or cause to be made such enquiries as it thinks fit and inform itself in relation to any matter in such manner as it thinks fit; (d) exercise and perform such other powers, authorities, functions and duties as are conferred on or entrusted to it by the regulations; (e) do all such acts and things as are, in its opinion, necessary or desirable to give effect to this Act. (2) The committee shall prepare and submit to the Minister, no later than 30th September in each year, a report on the exercise and performance by the committee of its powers, authorities, functions and defies under this Act during the twelve months ended on 30th June. last preceding the submission of the report. The Minister shall table a copy of the report in each year in the Legislative Assembly within 14 sitting days of the Assembly after the report is submitted to him. 11. Validity of committee' s acts . No act done or purportedly done by or on behalf of the committee under or for the purposes of this Act shall be held to be void or otherwise affected by reason of any defect in the appointment of any member of the committee or of any vacancy in the membership of the committee at the material time. 12. Business of committee . (1) The committee shall meet at such times as are determined by it and, subject to this Act, shall conduct its affairs in such manner as it determines. (2) Business before a meeting.of the committee shall not be dealt with by it unless a quorum is present at the meeting. A quorum of the committee shall consist of five members at the least. (3) Every meeting of the committee shall be presided over by its chairman, if he is present thereat, or, in his absence, by a member appointed by the members of the committee who are present thereat. (4) Each member of the committee who is present at a meeting shall have a deliberative vote with respect to business before the meeting and the person who presides over the meeting shall, in the event of an equality of votes on any business, have a second or casting vote. 13. Committee's power to prohibit pyramid selling schemes . (1) The committee may, by its order in writing, prohibit the promotion and conduct of any trading scheme that, in its opinion, is a pyramid selling scheme. (2) The committee, in its order made under subsection (1), may specify- (a) the name of the promoter or promoters of the scheme and such other particulars of his or their identity as it thinks fit; (b) the name of the participant or participants in the scheme and such other particulars of his or their identity as it thinks fit; (c) the name and other description of the goods or services provided or supplied or to be provided or supplied under the scheme; (d) such other particulars of the scheme as it thinks fit..

796 Pyramid Selling Schemes (Elim ination ) Act 1973, No. 87 (3) An order of the committee made under subsection (1) shall continue in force until it is revoked by order of the committee made under section 14 or is set aside by order of the Supreme Court upon an appeal under section 16. (4) Before making a prohibition order under this section the committee shall by notice in writing call upon at least one of the promoters of the trading scheme concerned to show cause in writing within a time specified in the notice why the order should not be made. If, within the time so specified, cause is not shown to the satisfaction of the committee why the order should not be made the committee may proceed to exercise the power conferred on it by subsections (1) and (2) without further reference to any promoter of the scheme. It shall be sufficient compliance with this subsection if the notice to show cause- (a) is given to the person to whom it is addressed; or (b) is sent to the person to whom it is addressed by pre-paid post letter addressed to him at his place of business or abode last known to the chairman of the committee. 14. Revocation of prohibition order. (1) If the committee is at any time satisfied that a trading scheme in respect of which a prohibition order made by it under section 13 is in force has been so reconstructed as no longer to be a pyramid selling scheme, the committee may, by its order in writing, revoke such order. (2) The revocation by order of the committee of any prohibition order made by it under section 13 shall not restrict the committee's power to make a further prohibition order under that section in relation to the trading scheme to which the order so revoked related. 15. Publication of orders of committee . (1) Notification of the making of a prohibition order under section 13 and of a revocation order under section 14 shall be published in the Gazette and such notification shall contain a copy of the order to which it relates. (2) The committee may, by such means as it thinks fit, give such notice of any order made by it as it deems necessary to inform the public of the order but the omission to give any or sufficient notice of the making of a prohibition order shall not be held to allow any person to avoid or lessen his liability under or pursuant to this Act to which the existence of the order is material. (3) If the committee thinks it desirable so to do, it may cause a copy of any order made by it to be given to any person-- (a) by delivering the same to that person personally; or (b) by leaving the same at his place of residence or business last known to the chairman of the committee or by sending the same by prepaid post letter addressed to that person at such place. 16. Appeal against committee 's prohibition order. (1) A person aggrieved by a prohibition order of the committee made under section 13 may appeal against the making of the order by way of application to a Judge of the Supreme Court who shall determine the issue of whether or not the trading scheme to which the order relates is a pyramid selling scheme.

Pyramid Selling Schemes ( Elimination ) Act 1973, No. 87 797 Every such application shall be made before the expiration of 28 days from the making of the order or of such extended period as a Judge of the Supreme Court for sufficient cause shown in any case allows. (2) The Judge who ' determines the application may confirm the order of the committee or set aside the same and his decision therein shall be final, and may make such order as to costs as he thinks fit. (3) An application may be made by way of originating summons and shall be conducted in accordance with the rules of the Supreme Court or, in so far as such rules are not appropriate to such applications, in accordance with the directions of a Judge of the Supreme Court. (4) The power to make rules of the Supreme Court includes power to make rules regarding the conduct of applications made under this section. 17. Offence of participating i n prohibited scheme. (1) A person who is a participant in or who in any way assists another person to be a participant in a pyramid selling scheme in relation to which there is in force a prohibition order made by the committee under section 13 commits an offence against this Act. Penalty: $2 000 or imprisonment for six months or both. (2) Subsection (1) does not apply either to a person whose participation in a pyramid selling scheme consists only of supplying goods or services provided to him to or for other persons under transactions effected by that participant or to any person who assists such first- mentioned person. PART IV-MISCELLANEOUS PROVISIONS 18. Proceedings for offences . (1) Prosecutions in respect of offences against this Act shall be by way of summary proceeding under the Justices Act1886-1973. (2) A prosecution may be instituted at any time within one year from the time when the matter of complaint arose or within six months after the matter of complaint came to the knowledge of the complainant, whichever period is the later to expire. 19. Order to repay moneys. (1) Upon convicting any person of an offence defined in Part II or Part III the court may, in addition to any penalty it may impose, order that the offender pay to any participant in the pyramid selling scheme concerned or to the court on behalf of such a participant moneys paid by that participant to become a participant in the scheme or for the purposes of the scheme, and, in default of payment of those moneys within the time limited by the order, that the offender be imprisoned for such period as the court thinks fit. (2) Subsection (1), any order made thereunder, or the service by an offender of any period of imprisonment pursuant to an order made thereunder shall not prejudice the right of any person to recover by civil action any moneys paid by him to become a participant in a pyramid selling scheme or for the purposes of the scheme.

798 Pyramid Selling Schemes ( Elimination ) Act 1973, No. 87 20. Civil remedy to recover payments . (1) Where after the commencement of this Act a payment referred to in section 6 (2) is made the person who made the payment may, subject to this section, sue for and recover as a debt due to him the amount of such payment from the person to whom or for whose benefit such payment was made. (2) Where in consideration of or in part consideration of the payment referred to in subsection (I) the person who made the payment was supplied with goods, the right of action provided for by subsection (1) shall not be available to him until he has returned to the proposed defendant in the action such of those goods as are in his possession or under his control. (3) In the case of a person who was supplied with goods the amount that he is entitled to recover pursuant to the right provided for by subsection (1) shall be reduced by an amount equal to- (a) the value of the goods not returned; and (b) any loss in value of the goods returned arising from his wilful act or neglect and in determining that amount the value of the goods in question shall be taken not to exceed the value (if any) placed on those goods by the supplier thereof for the purposes of the transaction under which the goods were supplied to that person. (4) An action provided for by subsection (1) shall be commenced within six months next following the day on which was made the payment in respect of which the action arises. 21. Use by committee of agents and reports . (I) For the purpose of conducting any inquiry, investigation or examination with respect to any trading scheme the committee may, by arrangement with the Commissioner of Police or, as the case may be, the permanent head of the department concerned, utilize the services of any member of the Police Force of Queensland or of any officer of the department of the Auditor-General or of the office of the Commissioner of Corporate Affairs or of the office of the Commissioner for Consumer Affairs and, in the performance of its functions under this Act,-may act upon the report of such a member or officer as if the report evidenced the findings of the committee upon an inquiry, investigation or examination conducted by it. (2) It is the duty of any member of the Police Force of Queensland, and of any officer of the department of the Auditor-General or of the office of the Commissioner for Corporate Affairs or of the office of the Commissioner for Consumer Affairs to whom is assigned any matter referred to in subsection (1) to carry out the inquiry, investigation or examination in question and to report thereon to the chairman of the committee. (3) The committee shall have access to and may make copies of or take extracts from any report that is furnished by any member of the Police Force of Queensland or that is in the official custody of any officer of the Public Service of Queensland relating to the conduct of any trading scheme. 22. Offences by bodies corporate . (1) When an offence against this Act is committed by a body corporate every director or officer of the body corporate shall be taken to have committed a like offence and

Pyramid Selling Schemes (Elimination) Act 1973, No. 87 799 he may be charged with that offence (either jointly with the body corporate or separately) and, subject to subsection (2), punished accordingly. (2) Where a director or officer of a body corporate is charged with an offence pursuant to subsection (1) it shall be a defence to prove that the contravention that constitutes the offence was committed without his consent or connivance and that by using due diligence he could not have prevented its commission. (3) I n this section the term " officer " in relation to a body corporate has the same meaning as it has in relation to a corporation in the Companies Act 1961-1972. 23. Powers in aid of committee . (1) Any person who in investigating the conduct or affairs of any trading scheme is acting underthe authority of or in aid of the committee- (a) may, subject to this section and at all reasonable times, enter any premises wherein are kept or he suspects to be kept records relating to the conduct or affairs of the trading scheme or from which there is conducted or he suspects to be conducted the trading scheme and for that purpose may use such force and such assistance as are reasonably necessary; (b) may search any premises entered by him and therein examine all books of account, contracts, agreements and other records relating to the conduct or affairs of the trading scheme, make copies of or take extracts from the same or seize and remove the originals of those books, contracts, agreements and other records. (2) The power to enter and to search premises conferred by subsection (I) is subject to the following provisions of this subsection. Before he enters any part of premises which part is used as a dwelling-house the person seeking entry for any purpose prescribed by subsection (I ) shall, save where he has permission of the occupier of that part to his entry. obtain from a justice a warrant to enter the place concerned. A justice who is satisfied upon a complaint made that there is reasonable cause to suspect- (a) that any place used as a dwelling house is being used for the promotion or conduct of a trading scheme or for the keeping of any papers or records relating to the promotion, conduct or affairs of a trading scheme; and (b) that the trading scheme is a pyramid selling scheme, may issue his warrant directed to the complainant to enter that place, specified in the warrant, for the purpose of exercising therein the powers conferred by subsection (1). (3) A warrant issued under subsection (2) shall be, for a period of one month from its issue, sufficient authority- (a) to the complainant to whom it is directed and to all persons acting in aid of him to enter the place specified in the warrant; and (b) to the complainant to whom it is directed to exercise in respect of the place specified in the warrant all the powers conferred by subsection (1).

800 Pyramid Selling Schemes ( Elimination ) Act 1973, No. 87 (4) A justice may, in accordance with the first paragraph of section 59 of the Justices Act1886-1973, issue a warrant in the first instance to apprehend any person who commits an offence against this Act. 24. Obstruction of committee's agents. Any person who obstructs, hinders or attempts to hinder any person in the due exercise by him of any power conferred by section 23 (1) commits an offence against this Act. Penalty: $1 000 or imprisonment for three months or both. 25. Proof and evidentiary effect of committee ' s orders . (1) Every document purporting to be an order of the committee made under section 13 or 14 and every copy thereof shall be taken to be the order of the committee, which it purports to evidence, if it is signed by the chairman or acting chairman of the committee and the order so evidenced shall, in the absence of evidence to the contrary, be deemed to have been duly made. (2) Judicial notice shall be taken of the publication in the Gazette of every order of the committee made under section 13 or 14. (3) For as long as a prohibition order of the committee made under section 13 continues in force it shall be conclusive evidence that the trading scheme to which the order relates is a pyramid selling scheme. 26. Evidentiary provisions . In any proceeding for the purposes of or arising out of this Act- (a) it shall not be necessary to prove (i) the signature of the chairman or acting chairman of the committee on any document that purports to be made for any purpose of this Act; or (ii) the authority of the chairman or acting chairman or any member of the committee to do anything for the purposes of this Act; (b) any statement or representation made by a person purporting to act or apparently acting for or on behalf of a person who is a defendant in or other party to that proceeding, whether the statement or representation was made before or after commencement of the proceeding, shall be taken to have been made with the authority of the defendant or such other party until the contrary is proved, and shall be admissible in evidence accordingly; (c) where the proceeding is for an offence against this Act, an allegation in the complaint that a pyramid selling scheme was or was not in operation on a specified date shall be evidence and, in the absence of evidence to the contrary, conclusive evidence of the matter alleged. 27. Protection relating to administration of Act. Neither the Crown nor any person shall incur any liability in respect of anything done for the purposes of this Act, or done in good faith purportedly for the purposes of this Act, by any member of the committee or by anyone acting in aid of or under the authority of the committee.

Pyramid Selling Schemes (Elimination) Act 1973, No. 87 801 28. led te rms is agreements concerning schemes. (1) In every agreement made (whether before or after the commencement of this Act) for the purposes of or in connexion with a trading scheme or proposed trading scheme there shall be implied the following terms:- (a) if, by reason of there being in force a prohibition order of the committee made under section 13, any party to the agreement would commit an offence against this Act were he to comply with the terms of the agreement in any respect he shall not be bound to comply with the terms of the agreement in that respect and he shall not incur any liability for his failure to so comply; (b) if at any time during the currency of the agreement there is in force in relation to the trading scheme a prohibition order of the committee made under section 13, any party to the agreement, being a participant in the scheme, who has received goods or services from any person in connexion with the scheme (whether such goods or services were provided or supplied before or after the making of the order)- (i) may, by notice in writing given to the other party or parties to the agreement, rescind the agreement whereupon the agreement shall no longer bind him and shall no longer confer any rights on him save that where he has paid money in respect of the provision or supply of goods returned by him pursuant to provision (ii) he is entitled to recover from all or any of them as a debt due to him by them jointly and severally, the person to whom he returned the goods and the promoter or promoters of the scheme, the money paid by him in respect of the provision or supply of the goods returned but so that he is not entitled to recover more than once in respect of the same goods; (ii) may return the goods, or such part thereof as is still in his possession, to • the person from whom he received them; and all other terms of the agreement shall be read and construed subject to the terms so implied and for the purpose of an action to recover pursuant to provision (i) the agreement shall be deemed to continue in effect notwithstanding its rescission pursuant to that provision. (2) It shall be sufficient compliance with paragraph (b) of subsection (1')- (a) if the notice in writing therein referred to is given to the person prescribed by delivering it to him personally, or by leaving it at his place of residence or business last known to the party by whom it is given or by sending the same by prepaid post letter addressed to the party to whom it is to be given at such place. (b) if the goods returned pursuant to the right therein conferred are left at premises last known to the party by whom they are returned as the place of residence or business of the person who provided or supplied them to him. 29. Regulations . The Governor in Council may make regulations not inconsistent with this Act with respect to- (a) prescribing, regulating and controlling matters and things connected with the functions, powers, duties and proceedings of the committee;

802 Pyramid Selling Schemes ( Elimination ) Act 1973, No. 87 (b) prescribing, regulating and controlling matters and things connected with appeals in respect of orders made by the committee under this Act; (c) providing for the granting of exemptions from this Act of particular goods or services or of particular trading schemes, the conditions on which such exemptions may be granted, and the rights and obligations of promoters of and participants in trading schemes so exempted; (d) prescribing acts, omissions or attempts therein specified to be offences against this Act and prescribing the penalties in respect thereof; (e) prescribing all or any matters and things required or permitted by this Act to be prescribed; (f) providing for all or any matters, things and purposes whether general or to meet particular cases that, in the opinion of the Governor in Council are necessary or desirable for the proper administration of this Act or to achieve the objects and purposes of this Act.