Australian Competition and Consumer Commission v Woolworths Group Limited (formerly called Woolworths Limited)

• Jurisdiction: Australia Federal only
• Judgment Date: 29 September 2020
• Neutral Citation: [2020] FCAFC 162
• Date: 29 September 2020
• Court: Full Federal Court (Australia)

Federal Court of Australia

Australian Competition and Consumer Commission v Woolworths Group Limited (formerly called Woolworths Limited) [2020] FCAFC 162

Appeal from:	Australian Competition and Consumer Commission v Woolworths Limited [2019] FCA 1039
File number:	VID 818 of 2019
Judgment of:	FOSTER, WIGNEY AND JACKSON JJ
Date of judgment:	29 September 2020
Catchwords:	CONSUMER LAW – whether statements featured on the labels affixed to the packaging of disposable crockery and cutlery products that those products were “Biodegradable and Compostable” conveyed representations that those products were capable of biodegrading and composting because of the nature of the materials of which they were composed – whether, in all the circumstances and in the context in which such statements were made, either in the alternative or in addition, they conveyed representations as to future matters, namely, that those products would biodegrade and compost within a reasonable time if they are disposed of and treated in accordance with established methods and processes
Legislation:	Australian Consumer Law, ss 4, 18, 29 and 33 Trade Practices Act 1974 (Cth), s 51A Explanatory Memorandum, Trade Practices Revision Bill 1986 (Cth)
Cases cited:	Ackers v Austcorp International Ltd [2009] FCA 432 Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd (No 2) (1999) 95 FCR 302 Australian Competition and Consumer Commission v Kimberly-Clark Australia Pty Ltd [2019] FCA 992 Australian Competition and Consumer Commission v Purple Harmony Plates Pty Limited [2001] FCA 1062 Australian Competition and Consumer Commission v We Buy Houses Pty Ltd [2017] FCA 915 Bill Acceptance Corporation Ltd v GWA Ltd (1983) 50 ALR 242 BMW Australia Ltd v Brewster (2019) 374 ALR 627 CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384 Digi-Tech (Australia) Ltd v Brand [2004] NSWCA 58; (2004) 62 IPR 184 Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd [2014] NSWCA 158 GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser (Australia) Pty Limited (No 2) [2018] FCA 1; (2018) 133 IPR 190 Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 McGrath v Australian Naturalcare Products Pty Ltd (2008) 165 FCR 230 Samsung Electronics Australia Pty Ltd v LG Electronics Australia Pty Ltd [2015] FCA 227; (2015) 113 IPR 11 Sykes v Reserve Bank of Australia (1998) 88 FCR 511 Thompson v Mastertouch TV Services Pty Limited (1977) 15 ALR 487 Willett v Thomas [2012] NSWCA 97
Division:	General Division
Registry:	Victoria
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Number of paragraphs:	145
Date of hearing:	25 February 2020
Counsel for the Appellant:	Mr CD Golvan AM QC and Ms C van Proctor
Solicitor for the Appellant:	Norton Rose Fulbright Australia
Counsel for the Respondent:	Mr CA Moore SC and Ms G Keesing
Solicitor for the Respondent:	Ashurst Australia

ORDERS

		VID 818 of 2019
BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Appellant
AND:	WOOLWORTHS GROUP LIMITED (ACN 000 014 675) (FORMERLY CALLED WOOLWORTHS LIMITED) Respondent

order made by:	FOSTER, WIGNEY AND JACKSON JJ
DATE OF ORDER:	29 SEPTEMBER 2020

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The appellant pay the respondent’s costs of and incidental to the appeal.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1. This appeal concerns the promotion and sale of certain disposable products by Woolworths Group Limited (formerly called Woolworths Limited) (Woolworths), a major Australian supermarket chain.

2. In the period between November 2014 and November 2017 (the relevant period), Woolworths sold in its Australian supermarkets and through its online store a range of disposable cutlery and crockery under the label “Select Eco” (the products).

3. The disposable cutlery comprised knives, forks and spoons and the disposable crockery comprised a variety of plates and bowls.

4. The Select Eco cutlery was made of Crystallised Polylactic Acid (CPLA). CPLA is a material made from polylactic resin which, in turn, is made from fermented corn starch, talc (or chalk) and other additives.

5. The Select Eco crockery was made of bagasse (as to 98.8%) and certain chemicals. Bagasse is a fibrous matter that remains after sugarcane or sorghum stalks are crushed in order to extract their juice.

6. Both CPLA and bagasse are non-toxic organic materials and, upon decomposition in an appropriately managed environment, both may be used as a soil additive.

7. The packaging in which the products were sold featured the statement “Biodegradable and Compostable”. That packaging also contained the statement: “Made from a renewable resource”.

8. An example of the packaging in which the products were sold is the packaging for the 10 BBQ Select Eco plates set which is reproduced below:

9. The Australian Competition and Consumer Commission (ACCC) considered that, by offering for sale and selling the products in packaging which featured the statements specified at [7] above and which resembled the get-up typified by the packaging reproduced at [8] above, Woolworths represented to consumers that the products would biodegrade and compost within a reasonable time when disposed of:

1. Using domestic composting; or

2. In circumstances ordinarily used for the disposal of such products, including conventional Australian landfill

and thereby engaged in misleading and deceptive conduct or conduct that was likely to mislead or deceive in contravention of s 18 of the Australian Consumer Law (ACL). We shall refer to these alleged representations as “the par 4 pleaded representations”.

10. Accordingly, on 2 March 2018, the ACCC instituted a proceeding against Woolworths in this Court in which it claimed declarations, injunctions, pecuniary penalties, publication orders and costs in respect of alleged contraventions of ss 18, 29(1)(a), 29(1)(g) and 33 of the ACL constituted by Woolworths’ conduct in offering for sale and selling the products in the packaging which we have described at [7] and [8] above.

11. After a four day trial in September 2018, the learned primary judge dismissed the ACCC’s proceeding with costs (Australian Competition and Consumer Commission v Woolworths Limited [2019] FCA 1039).

12. The ACCC appealed her Honour’s decision and by this judgment, we determine that appeal. For the reasons which follow, we have decided to dismiss the appeal with costs.

The Issues at Trial

13. The ACCC articulated its case in the Amended Concise Statement filed by it on 17 April 2018 (ACS). Woolworths answered that case in the Concise Response filed by it on 2 May 2018.

14. After describing the products, the packaging in which those products were sold and the suppliers and manufacturers of those products to Woolworths, the ACCC set out the par 4 pleaded representations (at par 4 of the ACS).

15. The ACCC then contended that the par 4 pleaded representations were representations as to future matters (par 13 of the ACS) and that Woolworths did not have reasonable grounds for making those representations (pars 5 to...