The extension of time from a two year limit to claim damages under section 106(6) of the Strata Schemes Management Act 2015 (SSMA) to six years on 30 June 2025 does not have retrospective effect if the previous two year time limit had expired as at 1 July 2026.
This was the District Court’s decision in John Goubran & Associates Pty Ltd ACN 070 974 819 v The Owners – Strata Plan 57150 [2026] NSWDC 9 (John Goubran).
Legislative background: section 106
Owners corporations are under a strict statutory duty to repair and maintain the common property and renew or replace fittings and fixtures comprised in the common property, these duties are found in sections 106(1) and 106(2) of the SSMA.
Section 106(5) of the SSMA allows a lot owner to make a claim for damages suffered by them because of their owners corporation’s failure to maintain and repair the common property.
Prior to 30 June 2025, when section 106(6) was amended, lot owners had two years from the date they first became aware of the loss to file a claim against their owners corporation However, on 30 June 2025, this two year time limit was extended to six years.
John Goubran
In John Goubran, the lot owner first became aware of their losses in September 2021 when water ingress was discovered in their lot. The water ingress was caused by a failed common property waterproof membrane in the lot above. Over the course of three years, the owners corporation took steps to engage builders to repair the cause of the water ingress. The lot owner said their lot was uninhabitable from September 2021 and that they suffered loss of rent from 15 December 2021 to 23 January 2024, the January date being after the owners corporation had repaired the cause and the lot was leased.
The District Court held, citing the High Court decision of Rodway v R [1990] HCA 19; (1990) 169 CLR 515, that “[t]he rule at common law is that a statute ought not be given a retrospective operation where to do so would affect an existing right or obligation unless the language of the statute expressly or by necessary implication requires such construction”. The District Court did not give a detailed analysis of the changes made to section 106(6), and it did not examine section 106(6) in the context of that section or in the context of the SSMA or its previous amendments. Furthermore, it did not examine the legislative intent for the change. Nevertheless, we the amendment was made without a savings provision and with no legislative notes, and so it appears the District Court relied on these factors in determining there was no express language in the section that would cause the amendment to be applied retrospectively.
As a side note, it is not stated in the decision when the lot owner first filed their claim, though the file number indicates it was in 2023. It is also not stated what the lot owner’s originally claimed. However we do know that they pleaded that the owners corporation was negligent in its duty to maintain the common property and to take care not to cause damage to adjacent and abutting property, and that on 14 July 2025, the lot owner amended their application to include a claim for relief under the recently amended 106(6) provision. Given those insights, it is possible that the lot owner may have known they were out of time to file for damages under the pre 30 June 2025 section 106 and so made their claim in a court for negligence, but then attempted to take advantage of the change of legislation mid-way through the proceedings.
What does this mean for lot owners?
It means that if you – a lot owner – first became aware of your loss two years and one day prior to 30 June 2025, you will be out of time to make a claim. However, if you became aware of your loss one year and 364 days before 30 June 2025, you now have another four years* to make your claim.
*Precise dates will be dependent on the date the lot owner first becomes aware of their loss, whether a leap year has occurred, therefore calculations in this article should not be relied on! We recommend you seek legal advice.
What does this mean for owners corporations?
Owners corporations must attend to repairs that are causing lot owner losses urgently and without delay. The introduction of section 106(5) and 106(6) in 2015 added emphasis to the owners corporation’s already strict liability under section 106(1) and (2).
What does this mean for lawyers?
Most 106(5) claims are heard by and decided by the NSW Civil and Administrative Tribunal. The Tribunal is not bound by precedent, so does not have to follow the District Court’s decision. Nevertheless, it is a decision by a higher court and will usually carry weight. However, there may be room for debate about the context of the change should the right case arise.
This is general information and should not be considered to be legal advice. You should obtain legal advice specific to your individual situation<
This post appears in Strata News #800.
Allison Benson
Benson Legal
E: allison@bensonlegal.com.au
Gemma Lumley
Benson Legal
E: gemma@bensonlegal.com.au
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