Responding to a Buyer’s Faulty-Car Claim in the SA Magistrates Court: A Motor Dealer’s Defence Guide

You are a licensed South Australian motor dealer, a buyer says the car you sold them is faulty, and now there is a claim. The worst thing you can do is panic; the second worst is ignore it. South Australia has no consumer tribunal, so a buyer’s faulty-car claim is dealt with in the Magistrates Court of South Australia, almost always in its Minor Civil jurisdiction. The dealers who come through these disputes well are the ones who understand their obligations first, test the claim calmly against the law, respond in writing and on time, and stay honest throughout. This page walks you through the essentials for free.

Know your obligations before you look for a defence

Two separate sets of rights can apply to the same car at once, and you need to know both. The first is the Australian Consumer Law (ACL) consumer guarantees, which apply nationally. The ACL guarantees that a vehicle supplied to a consumer is of acceptable quality — fit for purpose, free from defects, safe and durable — judged by what a reasonable consumer who knew the car’s full state and condition would accept, having regard to its age, kilometres and price. A used car is not held to the standard of a new one, but it must still meet what is reasonable for its price and age.

The second is the South Australian used-car statutory warranty under the Second-hand Vehicle Dealers Act 1995 (SA). When you sell a second-hand vehicle, you have a duty to repair defects to accepted trade standards. The warranty period depends on the sale price:

• Priced $3,001 to $6,000: defects appearing before 3,000 km or two months after sale (whichever comes first).
• Priced over $6,000: defects appearing before 5,000 km or three months after sale (whichever comes first).

The statutory warranty does not apply where the price was below $3,000, the vehicle was first registered more than 15 years before the year of sale, or it had been driven more than 200,000 km before sale. Motorcycles are excluded, and so are tyres and most batteries. Time the vehicle spends with you for repairs is added to the period, and — importantly — the warranty cannot be waived. Even where the statutory warranty has expired or does not apply, the ACL guarantees can still apply, so do not assume an expired warranty is the end of it.

The remedy rules often work in your favour

This is the point dealers most often misunderstand. Under the ACL, if a failure can be repaired and is not major, the consumer must give you a reasonable opportunity to fix it, and you choose the remedy — repair, an identical replacement, or a refund. A buyer cannot simply demand a refund for a minor fault. The ACCC’s own example is a slight rattle the dealer offers to fix in two days: most likely a minor failure, and the dealer would not have to offer a refund. A refund or rejection is the consumer’s right only where the failure is major (for example, the car is unsafe, or substantially unfit and cannot be fixed within a reasonable time) or cannot be remedied at all.

Be honest about the limits, though. A minor failure you fail to fix within a reasonable time, or several failed repair attempts taken together, can give the consumer the right to reject the vehicle. The sensible, lawful move when a genuine fault appears is to offer to inspect and repair promptly and in writing.

Is the claim actually made out?

A buyer being unhappy is not the same as a claim succeeding. Work through these questions honestly. Where a defence genuinely applies on your facts, you are entitled to raise it. Where a remedy is genuinely owed, provide it.

• Was the defect disclosed before sale? If the problem was specifically drawn to the buyer’s attention before they agreed to buy — for example on the prescribed SA Form 17, acknowledged by the buyer — it generally is not a failure for that reason. Keep the signed disclosure.
• Should a pre-sale examination have revealed it? If the buyer inspected the car and the fault was obvious, that can count. But the ACCC is clear that a buyer is not expected to find hidden or hard-to-detect faults such as engine, brake or gearbox problems.
• Did the buyer cause it, or misuse the car? The guarantee is not breached where the consumer caused the problem and the vehicle was damaged by abnormal use. The SA Act likewise excludes post-sale damage, misuse and accidents.
• Is it wear and tear? Normal wear and tear is not a failure. But if the car deteriorated faster or worse than you would expect for its age, kilometres and price under normal use, it may be.
• Were you given the chance to repair first? You have a right to remedy a non-major failure within a reasonable time before the buyer goes elsewhere or rejects.
• Has the right to reject been lost? Even a major failure may not justify rejection if, for example, the rejection period has ended or the car has been damaged after delivery for unrelated reasons.

The things you must not do

Meeting your obligations also means avoiding the conduct the ACCC has publicly flagged. You cannot rely on an “as is” or “no warranty” clause to defeat the guarantees — such terms are void. You must not tell the buyer to go to the manufacturer instead of helping them, refuse a remedy just because a warranty has expired, or make a confidentiality agreement a precondition of providing a remedy. And you must never hide a defect or mislead a buyer. Beyond being unlawful, these tactics tend to turn a small, cheap dispute into a large, expensive one and put your licence at risk.

The deadlines you cannot miss

If a buyer brings a statutory-warranty claim, they must first deliver the car and give you a reasonable opportunity to repair, and there is usually a conciliation conference with the Commissioner before the matter can reach court. Before suing, a claimant must also give you a pre-action notice at least 21 days out; if you receive a notice of intention, you have 21 days to serve a written response, including any counterclaim and any expert report.

Once a Claim is served, you must file and serve your defence within 28 days (30 business days if you were served outside Australia). There is no fee to file a defence, and in a minor civil claim it is automatically approved for filing. Miss the 28 days and the buyer can seek a default judgment against you. After your defence, each party must exchange a list of relevant documents within 14 days, and any expert (mechanic) report relied on before the first directions hearing must be filed on affidavit at least 2 business days beforehand.

At the hearing

A minor civil trial is an inquiry, not an adversarial contest. The Magistrate asks questions, may call witnesses, and is not bound by the rules of evidence; the Court decides according to equity, good conscience and the substantial merits. If your dealership is a company, the Court must let an officer or employee represent it — you do not need a lawyer in the room, though you can get advice beforehand. Bring organised copies of your documents for the Magistrate and the buyer, make sure your witnesses attend, and arrive early.

Above all, be honest. In South Australia, a false statement under oath is perjury, with a maximum of 7 years’ imprisonment, and fabricating or destroying evidence carries the same maximum. A defence built on honest, well-organised evidence is far stronger than one that collapses under a single question.

Get the full SA Defence Guide

The complete Motor Dealer Tribunal Defence Guide (South Australia) is a 12-to-20 page Business Defence Toolkit. It sets out your ACL and SA statutory-warranty obligations in full, a step-by-step test for whether a claim is made out, the complete Magistrates Court Minor Civil process and every deadline, an evidence bundle checklist and register, and adaptable response templates — a without-admission defence, an offer to inspect and repair, and a settlement proposal — plus guidance on consent judgments and the hearing. It is built around one principle: know your obligations, prepare your response, protect your business.

Get the full SA Defence Guide – $29

General information, not legal advice. Claim Done is not a law firm. The law changes and every dispute turns on its own facts — re-check the current legislation and official guidance, and get your own legal advice before acting.

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