A recent decision of the Full Federal Court has clarified the circumstances in which representations as to the likely performance of a product will be misleading and deceptive conduct.
The decision concerned a range of disposable cutlery and crockery comprising of knives, forks, spoons, plates and bowls which were marketed and sold by Woolworths under the ‘Select Eco’ label between November 2014 and November 2017.
Relevantly, the packaging of the Select Eco products featured the statement “biodegradable and compostable”, and that the products were “made from a renewable resource”.
The ACCC contended that a consumer would understand the packaging as representing the products as being capable of biodegrading and composting “within a reasonable period of time” and that Woolworths had failed to substantiate such a representation, which although not stated on the packaging, should have been implied.
The ACCC also argued that the packaging therefore was a representation about a future matter and breached the Australian Consumer Law in circumstances where Woolworths did not have reasonable grounds for making the representation.
Upon appeal, the Court unanimously dismissed all of the ACCC’s claims.
The Court upheld the findings of the primary judge who found that Woolworths had simply represented two of the inherent features of the Select Eco products which were both biodegradable and compostable.
The Court found that the representations were statements of present facts and were not representations with respect to future matters which are representations not capable of being proven to be true or false at the time of being made.
The Court also found that it was artificial to add a second element or additional representation and that Woolworths did not represent that the products would biodegrade or compost within a reasonable time as argued by the ACCC.
In any event, the Court found that even where Woolworths did make representations to that effect, such representations were true on the basis that the products were capable of biodegrading in landfill, or a rubbish dump, and were capable of being turned into useful and usable compost, within a matter of months.
This article provides general comments only. It does not purport to be legal advice. Before acting on the basis of any material contained in this article, we recommend that you seek professional advice.
Paul Dugan, Principal in our Disputes Team
Direct Telephone: +61 8 8210 2266
The author would like to thank Lachlan Chuong for his assistance in preparing this article.