Authors: David Andrews, Partner and Steven Song, Special Counsel
In the recent decision of John Goubran & Associates Pty Ltd ACN 070 974 819 v The Owners – Strata Plan 57150 [2026] NSWDC 9 , the District Court has ruled that recent amendments to section 106(6) of the Strata Schemes Management Act 2015 (NSW) (SSMA 2015), which extended the time for making of claims for consequential loss arising from failure to repair and maintain common property, are not retrospective.
Legislative Background
Owners corporations have strict obligations to properly repair and maintain the common property under section 106 of the SSMA 2015.
When the SSMA 2015 was enacted, it introduced section 106(5) which permitted lot owners to recover damages for consequential loss arising from an owners corporation’s failures to repair and maintain the common property. These losses could include damage to lot property and fittings, and loss of rent.
However, section 106(6) imposed a limitation of 2 years from when the owner first became aware of the loss within which they must commence proceedings.
On 1 July 2025, amendments to the SSMA 2015 extended the period under section 106(6) to 6 years from when the owner first became aware of the loss.
Background
In late 2021 the owners corporation of a four storey building in Burwood was notified of leaks in the common property. In 2024, and after having obtained reports, the owners corporation carried out works to address the failure of a waterproofing membrane on the balcony of one of the lots.
The lot owner had experienced water ingress during this time and sued the owners corporation for loss of rent arising from a failure to rent his property in the period between 2021 – 2024, and for a reduction in rent from 2024-2025. The loss of rent claim was originally characterised as a claim in negligence but was later amended to a claim under section 106(5) of the SSMA 2015.
The Law
In McElwaine v The Owners – Strata Plan 75975 [2017] NSWCA 239, the Court of Appeal held that the SSMA did not exclude claims against owners corporation by a lot owner in common law. A claim for negligence in common law would require a lot owner to prove:
- the owners corporation owed a duty of care to the lot owner,
- it had breached its duty;
- the owner had suffered loss because of the breach.
A claim under section 106(5) only requires the lot owner to prove that they had suffered consequential loss arising from the owners corporation’s breach of its statutory obligations under section 106.
As the claim was amended on 14 July 2025 (the amendment), the lot owner argued that the amendments to section 106(6) was retrospective because it was a procedural amendment, and the claim was brought within time.
The Court agreed with the owners corporation that the section 106(5) claim was brought out of time, and was not retrospective in its operation.
At [81]:
The amendment to s 106(6) of the Act affects existing rights and obligations. The amended statement of claim nominates 14 December 2021 as the date from which the time for the bringing of proceedings should be calculated. The time for the bringing of proceedings therefore expired, under the Act as it then was, on 15 December 2023. From that date, the owners corporation was not vulnerable to proceedings under the Act by the plaintiff with respect to the water ingress from No 12. If the amendment were to be treated as having retrospective operation, rights which were characterised by the High Court in Rodway as “existing, substantive rights – … the right to be free of a claim” would be taken away from the owners corporation, and therefore “could not be said to be merely procedural”.
The owners corporation did not dispute that it owned the lot owner a duty of care, and the Court nevertheless found the owner had made out their claim in common law negligence.
The decision clarifies the operation of the amended section 106(6) of the SSMA and is a timely reminder that owners corporation cannot rely on limitation periods alone to defend claims for consequential loss and it remains exposed to common law claims arising from breaches of its statutory obligations.