Australian Competition and Consumer Commission v Kimberly-Clark Australia Pty Ltd

• Jurisdiction: Australia Federal only
• Court: Federal Court
• Judge: GLEESON J
• Judgment Date: 28 June 2019
• Neutral Citation: [2019] FCA 992
• Date: 28 June 2019

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Kimberly-Clark Australia Pty Ltd [2019] FCA 992

File numbers:	NSD 2124 of 2016
Judge:	GLEESON J
Date of judgment:	28 June 2019
Catchwords:	CONSUMER LAW – misleading and deceptive conduct – where the applicant alleges contraventions of ss 18, 29(1) and 33 of the Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL) arising out of the respondent’s promotion of flushable wipes – where the applicant alleges that flushable wipes caused harm to household and municipal sewerage systems – whether representations were with respect to a future matter pursuant to s 4 of the ACL – whether flushability representation was false, misleading or deceptive – flushability representation was not false, misleading or deceptive
Legislation:	Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth) ss 4, 18, 29(1), 33 Evidence Act 1995 (Cth) s 140
Cases cited:	Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; (2018) 358 ALR 683 Amaca Pty Ltd (under NSW administered winding up) v Booth [2011] HCA 53; (2011) 246 CLR 36 Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; (2014) 317 ALR 73 Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682 Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd [1999] FCA 1161; (1999) 95 FCR 302 Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi SRL (No 12) [2016] FCA 822 Australian Competition and Consumer Commission v Purple Harmony Plates Pty Ltd [2001] FCA 1062 Australian Competition and Consumer Commission v Telstra Corporation Ltd [2007] FCA 1904; (2007) 244 ALR 470 Australian Competition and Consumer Commission v TF Woollam & Son Pty Ltd [2011] FCA 973; (2011) 196 FCR 212 Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 Australian Competition and Consumer Commission v Turi Foods Pty Ltd (No 4) [2013] FCA 665 Australian Securities and Investments Commission v Cassimatis (No 8) [2016] FCA 1023; (2016) 336 ALR 209 Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 Commissioner for Fair Trading, Department of Commerce v Perrett [2007] NSWSC 1130 GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser (Australia) Pty Limited (No 2) [2018] FCA 1 McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2; (2008) 165 FCR 230 Reckitt Benckiser (Australia) Pty Ltd v GlaxoSmithKline Australia Pty Ltd [2018] FCAFC 138 Roads and Traffic Authority v Royal [2008] HCA 19; (2008) 245 ALR 653 Samsung Electronics Australia Pty Limited v LG Electronics Australia Pty Limited [2015] FCA 227; (2015) 113 IPR 11 Specsavers v Luxottica [2013] FCA 648
Date of hearing:	17-21, 24-28 September 2018, 2 October 2018
Registry:	New South Wales
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Category:	Catchwords
Number of paragraphs:	330
Counsel for the Applicant:	Mr S White SC with Ms D Forrester
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Respondent:	Mr JC Sheahan QC with Mr J Redwood and Mr D Harris
Solicitor for the Respondent:	King & Wood Mallesons

ORDERS

		NSD 2124 of 2016
BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	KIMBERLY-CLARK AUSTRALIA PTY LTD (ACN 000 032 333) Respondent

JUDGE:	GLEESON J
DATE OF ORDER:	28 June 2019

THE COURT ORDERS THAT:

1. The parties approach the Associate to Gleeson J to fix a date for a case management hearing in connection with the applicant’s claims for relief concerning the “Made in Australia” representations.

2. Otherwise the application be dismissed with costs.

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

REASONS FOR JUDGMENT

GLEESON J:

1. The applicant (ACCC) claims that, between May 2013 and May 2016 (relevant period), the respondent (KCA) contravened the Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL), by its advertising and marketing of Kleenex Cottonelle Flushable Cleansing Cloths (KCFC wipes).

2. “Wipes” are moist towelettes, generally sold in packets or plastic tubs at supermarkets and other retail outlets. “Wipes” come in varying sizes and fabric strengths, and are marketed for a range of uses.

3. The KCFC wipes were marketed as “flushable”, in contrast to other wipe products which were marketed with no reference to flushability or with a recommendation: “Do not flush”.

4. The ACCC contends that, by its advertising and marketing of the KCFC wipes, KCA:

1. engaged in conduct in trade or commerce which was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18(1) of the ACL;

2. made false or misleading representations in connection with the supply, possible supply and/or promotion of its KCFC wipes that KCFC wipes had a particular quality in contravention of s 29(1)(a) of the ACL and/or had particular performance characteristics, uses and/or benefits, in contravention of s 29(1)(g) of the ACL; and

3. engaged in conduct in trade or commerce that was liable to mislead the public as to the nature, characteristics, and suitability for purpose of KCFC wipes, in contravention of s 33 of the ACL.

Summary of conclusions

5. The ACCC’s case fails, except in relation to a representation that the wipes were “Made in Australia”, which the parties agree was made and was false or misleading.

6. KCA represented that its KCFC wipes were “flushable”, which an ordinary reasonable consumer would have understood to mean that they were suitable to be flushed down the toilet and into sewerage systems in Australia. The KCFC wipes were intended to be flushed down the toilet, consistent with their intended use to remove human faecal matter.

7. The representation was based on the fact that KCFC wipes passed flushability tests set by the third edition of guidelines published by the International Nonwovens and Disposables Association (INDA) and the European Disposables and...