October 2, 2019 cogent_Admin

Our client wanted her Lemon Car Refunded under the Australian Consumer Law, she had bought a faulty car (a Jeep Compass 2017 model) from a motor dealer.Lemon car refunded


Within the first two days our client noticed the paintwork had scratches and returned it to the dealer. The motor dealer informed our client that the paint was repaired. However, upon inspection the client found the scratches remained, the motor dealer apologised and fitted a new stereo system for the inconvenience and had the paintwork buffed to remove the scratches.

What our client did not realise at the time was buffing the paintwork actually voided the vehicle paint protection warranty for the paint protection our client purchased. To make things worse, the engine failed within 3 months of purchase and had to be replaced.

Our client informed the dealer she did not want the engine replaced, she told them that she rejected the faulty car and wanted her lemon car refunded. The dealer refused and said she had to speak with the manufacturer FCA Australia Pty Ltd. Our client having rejected the faulty car, then commenced proceedings in the NSW Civil and Administrative Tribunal (NCAT) representing herself and seeking a refund for the Lemon car under the Australian Consumer Law.

Soon after commencement it became clear to our client that she would not be able to take on the motor dealer and manufactures representatives unassisted by her own legal representative. She contacted our office and sought our expert legal advice and assistance.

Our technical expertise in motor mechanics and legal proficiency in litigation and the Australian Consumer Law allowed us to obtain leave from the Tribunal to represent our client in this matter, and put on further evidence in support of our client’s case establishing that:

  1. the vehicle paintwork warranty was voided by the dealer buffing the paint work, and thus this was a major failure, and
  2. that the engine failure was also a major failure under the Australian Consumer Law entitling our client to reject the vehicle and claim a refund of the purchase price and damages for consequential losses.

We also asserted that the motor dealer and manufacturer were not entitled to repair the vehicle once the consumer had made an election to reject the vehicle, and that an engine replacement in any event is not a repair under the Australian Conumer Law.

The motor dealer and manufacture relied on defences that the paintwork and and engine failures were not major failures of the consumer guarantees because they were capable of repair within a reasonable time, and therefore the conumer was not entitled to reject the vehicle and have the lemon car refunded.


The Tribunal found the paintwork and engine failures constituted major failures of the consumer guarantees under the Australian Consumer Law both together and independently of each other.

The Tribunal also found that the motor dealer and manufacturer acted in concert in denying our client her consumer right to have the lemon car refunded and in effect, forced her to commence proceedings to enforce her rights. Consequently, the motor dealer and manufacturer were ordered to pay our client the sum of $46,234.54 for the vehicle finance and $10,115.86 to our client in damages. to read the full Tribunal Decision click here.

The Tribunal also, found that the motor dealer and manufacturer’s defences were manifestly hopeless and put our client to unnecessary costs of the proceedings. Accordingly, our client was awarded all her legal fees to be paid by the motor dealer on an indemnity basis. Therefore, our client had no out of pocket expenses for our fees. To read the full Tribunal decision on costs click here.

If you need assistance with your lemon car claim, contact us now!