Australia's men have missed out on the Cup quarter-finals in Vancouver after a 36-12 loss to New Zealand in their final pool match on Sunday (AEDT).
Every team in Pool C had one win and one loss going into the final round, turning the competition into a sudden death shootout for quarter-final spots.
The Aussies had beaten Spain and lost to France by narrow margins in their opening two games but New Zealand shaped as their toughest prospect.
New Zealand's Joe Ravouvou sprinted out of Australia's grasp to score the first try of the match and they were over again from the next restart, immediately heaping the pressure on the Aussies.
Tim Mikkelson made it three in a row for New Zealand with a superb turnover try as the game began to slip away from the Aussies in the first half.
Their 19-point half-time hole became 24 quickly after half-time with Ravouvou's second coming in the ninth minute.
Australia didn't give up the fight with Dylan Pietsch scoring Australia's first with three minutes left but the gap was simply to big to overcome.
New Zealand's Ngarohi McGarvey-Black sealed the game with a quick reply to Pietsch's score and Vilimini Koroi had the final say with the Kiwis' sixth of the game.
Rod Davies made a promising break in the final seconds of the game but the debutant appeared to injure himself in the process.
John Porch had the final say of the game but it was of little consolation for the Aussies.
Earlier in the day, a Simon Kennewell double helped Australia get over Spain, who have had the wood over Australia in recent encounters.The Spanish scored a try in the final two minutes but Australia managed to hold them out and take the win.
A single figure margin fell against the Aussies in their second match, against France, with a 21-17 defeat.
Australia had chances to win the game but some costly mistakes left them ruing a missed opportunity.
Winning that match would have all but secured them a spot in the Cup quarter-finals with one match left, as Spain shocked New Zealand with their first victory over the Kiwis in Sevens history.
Spain's victory left every team with one win and one loss as they entered the final pool rounds and leaving Australia in a sudden-death battle with New Zealand.
The result all but ends Australia's chances of automatic Olympic qualification as well, with just the top four at the end of the World Series making it through.
Australia came into Vancouver sitting sixth and a challenge finish won't help them close the gap on that top four of USA, Fiji, England and New Zealand.
It was a day of major upsets with Spain's win over New Zealand followed by a Canadian victory over defending champions Fiji.
Australia will move into the challenge side of the draw with finals to be played on Monday (AEDT).