Kipper
I had a look at the Victorian Sale of Goods (Vienna Convention) Act of 1987
You'll find it here;
http://www.dms.dpc.vic.gov.au/Domino/We ... 35a001.pdf
The act (in part) says
(2) Except where the parties have agreed otherwise, the goods
do not conform with the contract unless they—
(a) are fit for the purposes for which goods of the same
description would ordinarily be used;
(b) are fit for any particular purpose expressly or
impliedly made known to the seller at the time of the
conclusion of the contract, except where the
circumstances show that the buyer did not rely, or that
it was unreasonable for him to rely, on the seller's
skill and judgement;
(c) possess the qualities of goods which the seller has
held out to the buyer as a sample or
model;
(d) are contained or packaged in the manner usual for
such goods or, where there is no such manner, in a
manner adequate to preserve and protect the goods.
Now paragraph A talks about the goods being fit for what was intended.
Clearly, the breadmaker is not fit for what was intended. Also if you consult the relevent fair trading act, there are considerable fines for traders who give information that is misleading and deceptive. You could argue that the salesmans assurances regarding the damaged box formed part of the original contract and therefore his conduct was deceptive and misleading.
If I were you, I would go back and speak to the manager of the store. I would point out very firmly that you have legal rights given to you by statute and that you believe that by their supplying you with a defective product and ongoing refusal to honour their contract with you then you believe they may be breaching various consumer laws.
As Garry said, the Victorian State Consumer Affairs Office would help you Kipper
You did say, in your original post that the retailer offered you a refund. Now you probably won't like what follows (sorry)
Whilst you may well want compensation for your time and effort to cover the 40kms travel each way, it appears from what you say that you did not agree what would happen in the event of defect due to defective packaging at the time of contract. In the absense of such agreement, it may well be argued that reimbursement of your costs are not the responsibility of the retailer.
However, if you follow the deceptive and misleading conduct claim, you could mount an argument that you would not have accepted the damaged box without the salespersons assurances and that the costs that you have subsequently incurred are the fault of the salesperson and that you have incurred unnecessary costs and require re-imbursement.
There you go! Good luck
Hope this helps
Graham