Named in an ACAT faulty-car claim? Your first job is the 21-day response. An ACT buyer can take a dispute about a car you sold to the ACT Civil and Administrative Tribunal. You must lodge a Response – Civil Dispute within 21 days of being served, or judgment may be entered against you. This page explains your obligations, the genuine defences, and the deadlines, so you can respond properly rather than panic or ignore it.
Know your obligations. Prepare your response. Protect your business. A dealer’s best defence is almost always the same thing as doing the right thing: understanding what the law requires, checking the facts against it, keeping good records, and dealing with the buyer and the tribunal openly and honestly. You cannot contract out of the consumer guarantees or the ACT statutory warranty, and trying to dodge a genuine obligation risks penalties, licence action and a worse result. What you can do is test whether the claim is actually made out, meet any obligation you owe, and present a clear, honest case.
Two laws apply to the car you sold
When you sell a vehicle to a consumer in the ACT, two sets of rights run side by side and add to each other.
The Australian Consumer Law (ACL) consumer guarantees. Under s 54, the vehicle must be of acceptable quality: fit for its usual purposes, free from defects, safe and durable, judged by what a reasonable consumer fully acquainted with its state (including hidden defects) would accept, having regard to its nature, price and any representations (s 54(3)). The ACCC’s industry guide accepts that a used car is expected to last less long than a new one, so the vehicle’s age, kilometres and price all matter to what counts as acceptable.
The ACT used-car statutory warranty (Sale of Motor Vehicles Act 1977). Under s 23, if a defect appears within the Schedule 1 limit, you must repair or make it good at your own expense, placing the vehicle in a reasonable condition for its age, whether or not the defect existed at sale. For a second-hand car (not a motorcycle) driven not more than 160,000 km and manufactured not more than 10 years before sale, that limit is 5,000 km after sale or 3 months, whichever comes first (Schedule 1, item 3). Time while the car is back with you for assessment or repair does not count (s 23(4)).
Who chooses the remedy
This is where dealers slip, in both directions. The first question in any claim is whether the failure is major or minor.
- Minor failure that can be fixed: the buyer must give you a reasonable opportunity to remedy it, and you choose repair, replacement or refund (ACL s 259(2), s 261). The ACCC confirms you are not forced to refund a minor failure. If you offered a repair within a reasonable time and it was refused, that is a genuine answer to a refund demand.
- Major failure, or one that cannot be fixed: the buyer chooses between rejecting the car and keeping it with compensation for the drop in value (s 259(3)). A failure is major if a reasonable buyer who knew of it would not have bought the car, it differs significantly from its description, it is substantially unfit and cannot easily be fixed in a reasonable time, or it is unsafe (s 260).
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The genuine, lawful defences
A buyer who feels wronged does not win automatically; a respondent who disputes a claim must present evidence, and ACAT decides on that evidence. Each of these defences depends on the facts, and none is a loophole:
- Not a consumer (s 3): a buyer who bought the car for re-supply (a trader buying stock) is not protected by the guarantees.
- Sale by auction (s 54(1)(b)): a genuine auction sale is outside the acceptable quality guarantee (eBay auctions do not count, per the ACCC).
- Disclosed before sale (s 54(4)-(5); s 24): a specific defect you drew to the buyer’s attention in writing before they agreed to buy, or listed in a signed s 24 defect notice. This only covers the specific defect disclosed; a general “as is” line is void and discloses nothing, and under s 24(5) the buyer can still recover any cost above the amount you stated.
- Pre-sale examination (s 54(7)): a defect an examination the buyer actually did ought reasonably to have revealed. The ACCC is clear this does not extend to hidden or hard-to-detect faults such as engine, brake or gearbox problems.
- Buyer-caused or abnormal use (s 54(6)): where the buyer caused the problem or damaged the car by abnormal use. “Abnormal use” is not defined; the ACCC’s examples include putting petrol in a diesel engine. Ordinary use that merely exposed a pre-existing fault is not abnormal use.
- Wear and tear: normal wear and tear is not a failure, but only where the deterioration is genuinely within the normal range for a car of that age, kilometres and price.
- Statutory exclusions (s 25): the ACT warranty does not cover tyres, non-traction batteries, accessories, accidental damage after sale while you did not have the car, or misuse, negligence or racing after sale; nor commercial vehicles or a used car the buyer had already possessed for three months or more before the sale.
- Right to reject lost (s 262): rejection is not available once the rejection period has ended or the car has been disposed of or damaged after delivery for unrelated reasons.
Conduct the regulator has flagged
In its December 2025 report on second-hand cars, the ACCC named dealer conduct it treats as a concern: denying responsibility and putting the onus back on the consumer; arguing a failure does not exist despite clear evidence; claiming no remedy is due without an extended warranty; refusing a repair because the manufacturer allegedly will not act; a blanket “no refunds” policy; and claiming that once the statutory warranty expires there are no further obligations. If your intended defence sounds like one of these, test it hard before you run it, because the consumer guarantees can still apply after a statutory warranty ends.
Your ACAT deadlines, in short
- 21 days to respond. Lodge the Response – Civil Dispute (Form AF2021-29) within 21 days of being served (Procedures Rules r 107). There is no fee for a plain response; a counterclaim has a fee. You can admit, dispute, counterclaim or rely on a set-off.
- A directions hearing comes first. Since 1 October 2024 every civil dispute is listed for a short directions hearing, where ACAT may refer the matter to a conference or a hearing, give filing directions, or decide it.
- Money limit $25,000. ACAT’s civil jurisdiction is capped at $25,000 unless the excess is abandoned or the parties agree in writing (ACAT Act ss 18, 20, 21).
- Do not miss it. If you do not respond or attend, ACAT may enter default judgment or decide the application without you; an order made in your absence is set aside only in the interests of justice.
- You can appear yourself. No leave is needed to appear in person or through a representative; a company’s non-lawyer representative lodges an authority to act and a company search.
Honesty is mandatory, and it wins
A proceeding before ACAT is a legal proceeding for the administration-of-justice offences in the Criminal Code, which include perjury and falsifying evidence (ACAT Act s 70), and a witness may have to swear or affirm their evidence is true and correct. Everything you lodge and say must be true. Keep good records: the sale contract and invoice, the odometer reading and inspection at sale, any signed defect notice, full service and repair records with the dates the car was in your hands, dated photos, your correspondence with the buyer, and any independent expert report. A defence built on honest records beats one built on bluster.
This is general information, not legal advice. Claim Done is not a law firm and does not provide legal advice or represent parties at ACAT. Laws, forms, fees and figures change and vary with the facts; confirm the current position against the official sources before you act.
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Questions people ask
A buyer has lodged an ACAT civil dispute against my dealership. What do I do first?
Diarise the response deadline the day the application arrives. You must lodge a Response – Civil Dispute (Approved Form AF2021-29) within 21 days after the application is served (ACAT Procedures Rules 2024 r 107), and the form warns that judgment may be entered against you if you do not. Read the application, work out honestly whether the claim is made out, gather your documents, and set out your position in the response. Every civil dispute is then listed for a short directions hearing.
Can I rely on an ‘as is’ or ‘no refund’ clause the buyer signed?
No. Section 64 of the Australian Consumer Law makes void any term that tries to exclude, restrict or modify the consumer guarantees or the remedies for breaching them, so an ‘as is’, ‘no warranty’ or ‘sold as inspected’ clause cannot defeat them. The ACT statutory warranty is the same: a term purporting to exclude or limit the Sale of Motor Vehicles Act 1977 is void for an ordinary consumer sale (s 83). What can help is a specific defect you disclosed in writing before the sale (ACL s 54(4)-(5); a signed s 24 defect notice).
Do I have to give a refund, or can I repair the car?
It depends on whether the failure is major or minor. For a non-major failure that can be remedied, the buyer must give you a reasonable opportunity to repair, and you choose whether to repair, replace or refund (ACL s 259(2), s 261). The ACT statutory warranty also requires you to repair or make good a covered defect at your own expense (Sale of Motor Vehicles Act 1977 s 23). For a major failure, or one that cannot be remedied, the buyer chooses between rejecting the vehicle and keeping it with compensation (s 259(3), s 260). Classify the failure honestly first.
How long does the ACT used-car statutory warranty last?
For a second-hand car (not a motorcycle) that had been driven not more than 160,000 km and was manufactured not more than 10 years before sale, the warranty limit is 5,000 km after sale or 3 months, whichever is reached first (Sale of Motor Vehicles Act 1977 (ACT) Schedule 1, item 3). Time while the vehicle is in your possession to assess or repair a defect is disregarded (s 23(4)). The ACL consumer guarantees sit alongside the statutory warranty and are not tied to that period.
What happens if I do not lodge a response or do not attend?
If you do not respond within 21 days, judgment may be entered against you, and ACAT may enter default judgment for failure to lodge a response or to attend the directions hearing. If a respondent fails to appear, ACAT may decide the application without you (ACAT Act s 47A(2)(b); Procedures Rules r 61(2)(c)). An order made in your absence can be set aside only in the interests of justice (r 70), so do not treat that as a fallback: lodge the response and attend.
Do I need a lawyer at ACAT, and how much is in dispute?
ACAT’s civil-dispute jurisdiction is limited to amounts of not more than $25,000 unless the excess is abandoned or the parties agree in writing (ACAT Act ss 18, 20, 21). You can appear for your dealership without leave, including through a manager with proper authority and a company authority to act (s 30; Procedures Rules r 41). Consider a lawyer where the amount is near the limit, the other side has one, the issues are complex, or a counterclaim makes the matter larger.
What changes when your answer is in writing
Same problem. What a prepared case looks like.
Getting it drafted
Can I have a Tribunal Response drafted for me instead of writing it myself?
Yes. Claim Done (claimdone.com.au) drafts a Tribunal Response from the answers you give about your situation for a flat $129 AUD. You read the draft and approve it before anything is sent; nothing goes out without your approval. Start at claimdone.com.au/begin/?service=tribunal-response. Claim Done is not a law firm and does not give legal advice.
How much does a Tribunal Response cost, and how long does it take?
$129 AUD flat, shown before you pay, with no subscription. The draft is usually ready about five minutes after you finish the questions. Email delivery is free; registered post is $29 extra. It covers every Australian state and territory.
Does Claim Done lodge the application with the tribunal or court?
No. Claim Done drafts the documents; you lodge them yourself and pay the tribunal's or court's own filing fee directly to it. The draft names the right tribunal or court and Act for your state.