The Full Federal Court today upheld the appeal of Australian Communications Network Pty Ltd against an earlier judgment by Justice Selway that the scheme operated by ACN at that stage was a pyramid selling scheme in breach of the Trade Practices Act 1974.
The Full Court found that the payments the ACCC alleged were "recruitment payments", namely customer acquisition bonuses and residual override commissions, were not recruitment payments as defined under s.65AAD of the Act because if the recruiter does no more than recruit other participants there is no entitlement to any payment; the benefits the recruiter gets come from customers for telephone services and from ACN.
It set aside the orders and declarations made by Justice Mansfield on 20 July 2005 and ordered the ACCC to pay costs.
The ACCC is considering the judgment to decide if an application for special leave to appeal to the High Court is appropriate.