FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v Kimberly-Clark Australia Pty Ltd [2020] FCAFC 107
Appeal from: Australian Competition and Consumer Commission v Kimberly-Clark Australia Pty Ltd [2019] FCA 992 File numbers: NSD 1195 of 2019 Judges: PERRAM, MURPHY AND THAWLEY JJ Date of judgment: 15 June 2020 Catchwords: CONSUMER LAW – misleading and deceptive conduct –
where the appellant alleges contraventions of ss 18, 29
and 33 of the Australian Consumer Law, being Schedule 2
to the Competition and Consumer Act 2010 (Cth),
arising out of the respondent’s marketing of wipes as “flushable” – where the appellant alleges that flushable wipes caused harm to household and municipal sewerage
– whether representation was false, misleading or deceptive – whether representations made that wipes had characteristics, including as to disintegration, similar to toilet paper – characteristics and disintegration representations not made – appeal dismissedLegislation: Competition and Consumer Act 2010 (Cth), Sch 2, Australian Consumer Law ss 18, 29, 33 Date of hearing: 23 - 24 February 2020 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 96 Counsel for the Appellant: Mr White SC, with Mr Tynan and Ms Forrester Solicitor for the Appellant: Australian Government Solicitors Counsel for the Respondent: Mr Sheahan QC with Mr Redwood and Mr Harris Solicitor for the Respondent: King & Wood Mallesons ORDERS
NSD 1195 of 2019 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Appellant
AND: KIMBERLY-CLARK AUSTRALIA PTY LTD
Respondent
JUDGES:
PERRAM, MURPHY AND THAWLEY JJ
DATE OF ORDER:
15 JUNE 2020
THE COURT ORDERS THAT:
1.The appeal is dismissed.
2.The appellant pay the respondent’s costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
THE COURT:
overview
Moist towelettes or “wipes” of various sizes and fabric strengths have become increasingly popular amongst consumers. Wipes are known to cause problems when disposed of via the sewerage. Most wipes are not, and are not marketed as, “flushable”. Indeed, the packaging of many wipes recommends that they not be flushed. This proceeding concerns wipes designed to be, and marketed as, “flushable”. Unlike toilet paper which becomes soggy when wet, the flushable wipes were designed to be stored moist and intact. They were designed to break down or disperse with agitation in water.
When material snags in a household drain line or in the municipal sewerage, further material can accumulate and form a blockage. Material, including wipes of all kinds and toilet paper, can accumulate with fats, grease, hair and other waste to form congealed masses known as fatbergs. The Oxford English Dictionary defines a fatberg as “a large lump or mass consisting chiefly of cooking fat which has congealed and hardened after being down a domestic drain; (now esp.) a very large mass of solid or compacted waste found blocking a sewage system”. Blockages and fatbergs pose what has become an increasing problem for households and municipal waste…
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- AGLC
- Australian Competition and Consumer Commission v Kimberly-Clark Australia Pty Ltd [2020] FCAFC 107
- Case
- [2020] FCAFC 107
- Decision Date
CaseChat Overview and Summary
The court found that the primary judge was correct in concluding that the representations of characteristics and disintegration were not made. The court held that the totality of the packaging and website statements or representations should be considered in determining what the ordinary reasonable consumer would have understood. The court held that six of the eight representations relied upon by the Commission did not mention toilet paper or compare the KCFC wipes with the characteristics or performance of toilet paper. Therefore, the court concluded that the inference drawn by the primary judge was not material to the ultimate decision and dismissed the appeal. The court further found that the Commission failed to establish its case that the KCFC wipes caused harm.
The appeal was dismissed, and the appellant was ordered to pay the respondent's costs. This decision highlights the importance of considering all relevant factors and representations made by a company when determining if their conduct is misleading or deceptive under the Australian Consumer Law.
Orders
Orders of the court
1. The appeal is dismissed.
2. The appellant pay the respondent’s costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Ground 6 can be disposed of without examining whether the inference should not have been drawn. The inference drawn by the primary judge was not shown to be material to the ultimate decision. The Commission failed to establish its case that the KCFC wipes caused harm. The inference drawn at J[90] could not have affected the result.THE CHARACTERISTICS AND DISINTEGRATION REPRESENTATIONS Grounds 7 and 8 concern the characteristics and disintegration representations:7.In reaching the conclusion at paragraph [273] that the Respondent did not represent that the KCFC wipes have similar characteristics to toilet paper or would break up or disintegrate in a timeframe and manner similar to toilet paper, the trial judge erred by failing to take into account, or by failing to give sufficient weight to, the following representations made by the Respondent:a. KCFC wipes are “flushable”;b. KCFC wipes “break down in sewerage system or septic tank”;c. KCFC wipes are “able to be flushed in the toilet”;d. KCFC wipes are “completely flushable”;e. KCFC wipes “will break up in the sewerage or septic system like toilet paper” (This representation only relates to KCFC Kids Wipes);f. KCFC wipes are “safe to flush” (This representation only relates to KCFC Kids Wipes);g. KCFC wipes are “suitable for use in properly maintained sewerage systems and commercial septic tanks” (This representation only relates to KCFC Out and About Wipes);and the following pictorial representation:8. The trial judge ought to have found that:a. the Respondent made the following representations concerning the KCFC wipes:i. KCFC wipes “had similar characteristics to toilet paper when flushed, as they would behave in a similar way to toilet paper in that they break up or disintegrate in a manner or timeframe similar to toilet paper when flushed” (the Characteristics Representation);ii. KCFC wipes “would break up or disintegrate in a timeframe and manner similar to toilet paper” (the Disintegration Representation); andb. the Characteristics Representation and the Disintegration Representation were false or misleading.ParticularsThe relevant facts found by the trial judge include that “KCFC wipes had inferior properties of breakdown and dispersion than toilet paper when flushed”, paragraph [14]; and “toilet paper breaks down more quickly and easily than KCFC wipes and the rate of breakdown is a significant characteristic when considering flushability, paragraph [292]. The primary judge’s conclusions must be shown to be erroneous for them to be disturbed on appeal. For the reasons which follow no error has been shown in her Honour’s reasoning. The totality of the packaging and website statements or representations are set out at J[121] to J[125]. In ground 7, the Commission focussed attention on eight representations. The primary judge correctly focussed on what the ordinary reasonable consumer would have understood from all of the conduct. Of the eight representations relied upon by the Commission, six do not mention toilet paper or compare the KCFC wipes with the characteristics or performance of toilet paper.