Looks like some water was on the board and two terminals on the transformer have arced.

In the pic attached it was terminals numbered 1 & 2. I have re soldered the two terminals but it made no difference.

Any ideas what might have failed on this?

Thanks for any help.

 

Looks like the board was not covered with conformal coating which should have been applied for any appliance in a wet environment.

 

Looks like the board was not covered with conformal coating which should have been applied for any appliance in a wet environment.

Yes, like the seal is right on the side of the board, (I suspect that's most likely where the water came from) and no protection on the board??
Very clever design!