By Sam Nelson – Associate, Axia Litigation Lawyers – 9th July 2026
Buying a new car, caravan or other major purchase should feel like the start of something good, not the beginning of a repair log. Yet for many Queensland consumers, that is exactly what happens: the vehicle spends more time at the workshop than on the road, the defects keep returning, and the promise of reliable use is replaced by repeated frustration.
At that point, a serious legal question emerges: is this just a nuisance, or is it a major failure under the Australian Consumer Law?
The Courts and Tribunals say that distinction matters. If a product has suffered a major failure, the consumer’s rights are significantly stronger. In the right case, the consumer may be able to reject the goods and seek a refund or replacement, or keep the goods and seek compensation for the reduction in value. However, the law is not as simple as an internet search might suggest. It is important to follow the correct steps, preserve evidence, and act within the relevant time frames.
This article explains what a major failure is, how the law applies, what evidence (including expert reports) may be needed, and where a claim should be brought.
Quick Answer
Under section 260 of the Australian Consumer Law, goods may have suffered a major failure if a reasonable consumer, fully aware of the nature and extent of the problem, would not have acquired them; if they significantly depart from their description, sample or demonstration model; if they are substantially unfit for their normal purpose or a disclosed purpose and cannot easily be remedied within a reasonable time; or if they are unsafe.
Subject to the rejection period and other statutory limits, a major failure may entitle the consumer to reject the goods and seek a refund or replacement, or to keep the goods and seek compensation for the reduction in value. Not every defect reaches this threshold. The test is applied objectively.
What Is a “Major Failure” Under the ACL?
The term “major failure” is not left to guesswork. Section 260 of the Australian Consumer Law sets out the circumstances in which a failure to comply with a consumer guarantee is a major failure for goods.
They include:
- a reasonable consumer, fully aware of the problem, would not have acquired the goods;
- the goods significantly depart from their description, sample or demonstration model;
- the goods are substantially unfit for their normal purpose and cannot easily and within a reasonable time be remedied;
- the goods are substantially unfit for a disclosed purpose and cannot easily and within a reasonable time be remedied; or
- the goods are unsafe.
For services, section 268 applies a comparable test. A major failure is one that goes to the heart of what the consumer paid for.
If the failure is major, the consumer’s remedies are more powerful. Subject to the rejection period and other statutory limits, the consumer may be able to reject the goods and seek a refund or replacement, or retain the goods and seek compensation for the reduction in their value.
If the failure is only minor, the supplier generally gets the first opportunity to repair, replace or refund.
The Objective Test: What Would a Reasonable Consumer Think?
The major failure question is not answered by how frustrated the consumer feels, or how many times they have been inconvenienced. It is answered objectively: would a reasonable consumer, fully informed of the defect and its consequences, have acquired the goods?
Tribunals and courts applying this test look at:
- the seriousness of the defect;
- whether safety is affected;
- how easily the problem can be repaired;
- how long repairs take;
- whether the problem recurs after repair attempts; and
- the price and expected durability of the product.
Nuth v Soel Products Australia Pty Ltd trading as Caravan RV CQ [2020] QCAT 369 is a key authority on this point. It confirms that a major failure may arise from a single defect or from a number of defects considered together, and that the central question is whether a reasonable consumer, fully acquainted with the nature and extent of the failures, would have acquired the goods.
Not Every Defect Is a Major Failure — But Multiple Defects Can Add Up
A single minor fault will rarely meet the threshold. However, a series of defects, even individually modest ones, may collectively amount to a major failure when considered together.
In Jarmain v Market Direct Group Pty Ltd t/as MDC Camper Trailers & Offroad Caravans [2022] QCAT 375, the Tribunal considered a caravan with water leaks, structural faults and flooring problems. No single issue was necessarily catastrophic. The Tribunal found, however, that the combination of defects meant a reasonable consumer would not have bought the caravan.
Member Deane also held that a reasonable consumer would not expect a new off-road caravan to require replacement of its exterior walls and floor within a short period after purchase and limited use. Considered individually and in aggregate, the defects amounted to a major failure.
Thompson v Apollo Investments Pty Ltd t/as Kratzmann Caravans [2024] QCAT 254 reached a similar conclusion. The caravan in that case suffered from twelve separate defects, poor fit and finish, missing parts, water pooling and safety concerns. Supported by expert reports, the Tribunal found these defects together amounted to a major failure.
It is also important to remember the other side of the coin. In Baas v JB Hi Fi Group Pty Ltd [2021] NSWCATAP 10, the Tribunal confirmed that not every problem crosses the threshold. The defect must be serious enough, viewed objectively, to satisfy the statutory test. Consumers should approach their claim with that discipline, rather than assuming that any recurring fault is automatically a major failure.
Safety and Durability Carry Significant Weight
Safety is one of the strongest indicators of major failure. A defect that makes a vehicle unsafe to drive or use may significantly strengthen the consumer’s legal position.
In Knox v Tait Motors Pty Ltd t/as Tait Auto Group [2021] QCATA 87, the Appeal Tribunal set aside an earlier QCAT decision and ordered a refund for Mr Knox’s Holden Colorado. The Tribunal found that excessive engine oil consumption was a serious defect, and that a reasonable consumer, fully aware of the problem, would not have acquired the vehicle.
Durability and price are also relevant. A higher-priced product, sold as suitable for demanding conditions, carries a higher consumer expectation. The caravan decisions in Jarmain and Thompson both reflect this. Off-road caravans are expected to perform in conditions for which they are marketed, and early structural failure may be difficult to characterise as a minor problem.
Repairability and Time Out of Service
Even where a defect can technically be fixed, the Tribunal will examine how extensive or costly the repair is, how long the goods have been out of service, and whether repair attempts have failed before.
In Haisman v Drive (Aust) Pty Ltd [2020] QCAT 44, the Tribunal ordered the vehicle to be returned and a refund paid after finding that the vehicle was not roadworthy at the time of supply, and that it had spent approximately 30 days of the first two months in the dealer’s possession. The failure to supply a roadworthy vehicle, combined with the extended time out of service, supported the finding that a major failure had occurred.
Latent Defects: When the Problem Only Appears Later
Some defects are not apparent at the time of purchase. They emerge only after months of use, and their true seriousness may not be understood until a repair quote arrives or an expert inspects the goods. The law recognises this.
In Vautin v BY Winddown Inc (formerly Bertram Yachts) (No 4) [2018] FCA 426, the Federal Court considered serious structural defects in a yacht that were not apparent at the time of purchase. The case illustrates that significant problems can be hidden initially, and that their later discovery does not necessarily prevent a consumer from pursuing a remedy.
Where latent defects are substantial and render the goods unfit for their intended purpose, they may support a finding that the statutory guarantees have not been met.
This is particularly relevant for caravans and motor vehicles, where certain structural or mechanical defects may only manifest after a period of regular use.
What Should a Consumer Do?
If you believe your vehicle, caravan or other major purchase may have suffered a major failure, the steps you take from the outset will matter to the outcome of any claim.
- Put the complaint in writing. Notify the dealer or supplier in writing, specifying each defect and documenting all repair attempts.
- Keep thorough records. Retain all repair invoices, written communications, photographs and any inspection reports.
- Consider an expert report. Where the defect is technical or disputed, independent expert evidence is often the difference between a claim that succeeds and one that does not.
- Act promptly. Delay can affect the right to reject the goods, including where the rejection period has ended or the consumer’s conduct is said to be inconsistent with rejection.
Should the Consumer Reject the Goods or Keep Them?
That depends on whether the failure is major or minor.
If the failure is minor, the supplier generally gets the first opportunity to repair, replace or refund.
If the failure is major, the consumer may be able to:
- reject the goods and seek a refund or replacement; or
- keep the goods and seek compensation for the reduction in value.
For bulky goods like caravans, the supplier may also be required to collect the item. That can be an important practical issue for consumers dealing with a large, defective product.
Where Are These Claims Heard in Queensland?
Many vehicle and caravan disputes in Queensland are brought in the Queensland Civil and Administrative Tribunal, known as QCAT, particularly where the claim falls within QCAT’s motor vehicle dispute jurisdiction and the amount claimed does not exceed $100,000.
Claims exceeding that threshold will need to be commenced through the Courts.
Knowing the correct forum matters. Filing in the wrong jurisdiction can cause delays and cost problems that could have been avoided with early advice.
When Should Proceedings Be Commenced?
Consumers often wait too long because they are trying to be reasonable. Reasonableness in negotiation is sensible. Delay can seriously affect the claim.
Proceedings should generally be considered once:
- the consumer has given the supplier a proper opportunity to respond;
- defects have been documented and, where necessary, assessed by an expert;
- it is apparent that repairs have failed or are unlikely to succeed;
- the consumer is still within the relevant limitation or rejection period; and
- the consumer has enough evidence to prove the case.
For damages claims against a manufacturer, the three-year limitation period runs from the time the consumer became aware, or ought reasonably to have become aware, of the failure.
Cases That Have Shaped the Law in This Area
The following decisions provide useful reference points for ACL major failure claims involving vehicles, caravans and other consumer goods.
Nuth v Soel Products Australia Pty Ltd trading as Caravan RV CQ [2020] QCAT 369 — confirms that a major failure may arise from a series of defects, not just a single dramatic fault.
Baas v JB Hi Fi Group Pty Ltd [2021] NSWCATAP 10 & Safi v Heartland Motors Pty Ltd t/as Heartland Chrysler [2016] NSWCATAP 80 — a useful reminder that not every problem reaches the threshold. The defect must satisfy the objective test.
Cunnington v Soel Products Australia Pty Ltd trading as Titan Caravans [2020] QCAT 158 — a Queensland caravan case in which the Tribunal ordered a refund and return of the caravan.
Jarmain v Market Direct Group Pty Ltd t/as MDC Camper Trailers & Offroad Caravans [2022] QCAT 375 — illustrates the importance of cumulative defects and expert evidence in caravan disputes.
Thompson v Apollo Investments Pty Ltd t/as Kratzmann Caravans [2024] QCAT 254 — a more recent Queensland decision showing how multiple defects, safety concerns and expert evidence can support a major failure finding.
Williams v Toyota Motor Corporation Australia Limited [2024] HCA 38 and Capic v Ford Motor Company of Australia Pty Ltd [2024] HCA 39 — significant High Court decisions for damages claims under the ACL, particularly the assessment of reduction in value.
Moore v Scenic Tours Pty Ltd [2020] HCA 17 — an important High Court decision on ACL damages in the services context, particularly where disappointment or distress forms part of the claimed loss. While not a vehicle or caravan goods case, it remains a useful reference point for ACL damages principles.
The Takeaway
Not every defective vehicle is legally a lemon. The ACL focuses on evidence, statutory tests and reasonable consumer expectations, not frustration or inconvenience alone.
Consumers who believe they have experienced a major failure should document defects carefully, notify the supplier promptly, obtain expert evidence where the issue is technical or disputed, and commence proceedings in the correct forum within the applicable time limits.
The Australian Consumer Law provides powerful protections for consumers. Those protections are not self-executing. A major failure can entitle a consumer to a refund, replacement or compensation, but the claim must be handled carefully from the outset.
Gathering the right evidence, understanding the applicable legal tests, and acting before delay becomes the real problem are the foundations of a well-run ACL claim.
Speak With Axia Litigation Lawyers
Not sure where you stand after purchasing a defective car, caravan or other major product?
The team at Axia Litigation Lawyers can explain how the Australian Consumer Law may apply to your circumstances and help you understand the options that may be available to you.
Contact Axia Litigation Lawyers to speak with our experienced team about your unique situation.