Sydney Water has warned that a Federal Court ruling, finding a Kleenex brand of wet wipes was suitable for flushing, could result in consumers going "open slather", treating their toilets like a watery garbage bin.

On Friday, Justice Jacqueline Gleeson dismissed a case by the Australian Competition and Consumer Commission against Kimberly-Clark Australia, which makes Kleenex Cottonelle Flushable Cleansing Cloths (KCFC wipes). She ordered the ACCC to pay costs.

The ACCC alleged that between May 2013 and May 2016 Kimberly-Clark variously advertised its personal hygiene wipes as "flushable", "completely flushable" and "able to be flushed".

The ACCC alleged that KCFC wipes had breached Australian consumer law by marketing them as flushable when they were not because they did not break down like toilet paper.

In her decision on Friday, Justice Gleeson said she was not persuaded that these wipes were unsuitable for flushing down the toilet. As such, the company's claims did not breach consumer law because they were not false nor misleading.