Adhami v The Owners – Strata Plan no 85271

"In February 2022 our apartment impacted by ingress of water from ceiling and wall, water penetrating under timber flooring and creating mould on walls and ceiling, after hundreds of correspondence strata manager failed to rectify the damages."

1. The application records that the parties engaged in mediation but did not reach a settlement.
2. Attached to the application are copies of emails from the Appellant to either the Respondent or the Respondent's managing agent. The most recent of those emails is dated 26 August 2024, the substance of which is that the Appellant requested that remedial work be undertaken by the Respondent.

1. The decision under appeal is dated 21 January 2025 and it records that the Respondent did not appear at the hearing. We note that in the appeal proceedings the Respondent contends that it did not have notice of the hearing. The record of the decision by the Tribunal is that the "application for breach of s 106(1) of the Strata Schemes Management Act 2015 is dismissed after hearing." Then follows brief reasons as follows:

"The applicant filed a claim for orders for the repair of the common property and for damage to his belongings as a result of water leaking into his unit. He first observed and reported the problem on 1 March 2022. He first observed damage to his wooden flooring in late March or April 2022. This application was filed by the applicant on 6 September 2024. Pursuant to s 106(6) of the Strata Schemes Management Act the applicant cannot bring an action for breach of statutory duty under s 106(1) of the Act more than two years after first becoming aware of the loss. Accordingly, the claim is out of time and the Tribunal does not have the jurisdiction to hear the matter".

1. The above is the decision, the subject of the appeal. We will refer to it as the "Decision".

1. The Appellant lodged a Notice of Appeal on 10 February 2025.
2. In the Notice of Appeal, the Appellant contended that the Tribunal had incorrectly applied the two year time limitation period under s 106(6). The Appellant contended that the Tribunal should have ordered compensation and had failed to order remedial work for the "ongoing structural issues in my apartment". The Appellant contended that he had suffered procedural unfairness by the failure of the Tribunal to consider the evidence. The Appellant listed a number of orders that the Appeal Panel should make. These included a number of orders for repair or remediation or replacement (see orders 4, 5 and 6 of part 5C of the attachment to the Notice of Appeal).
3. The Respondent filed a Reply to Appeal in which the Respondent maintained that the Tribunal did not err and that the appeal should be dismissed.
4. The Respondent has also lodged extensive submissions in support of the proposed order that the appeal be dismissed. The essence of the Respondent's submissions is that the Tribunal did not err in imposing a two year time limit on the Appellant's application. In other words, the Respondent submitted that because the Appellant first became aware of the alleged loss more than two years prior to the lodgment of the application he was not able to pursue his application by reason of s 106(6) of the Strata Schemes Management Act 2015 (NSW) (the Strata Act).
5. We set out below the terms of s 106 in full:

106 Duty of owners corporation to maintain and repair property

(1) An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation.

(2) An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation.

(3) This section does not apply to a particular item of property if the owners corporation determines by special resolution that--

(a) it is inappropriate to maintain, renew, replace or repair the property, and

(b) its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.

(4) If an owners corporation has taken action against an owner or other person in respect of damage to the common property, it may defer compliance with subsection (1) or (2) in relation to the damage to the property until the completion of the action if the failure to comply will not affect the safety of any building, structure or common property in the strata scheme.

(5) An owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation.

(6) An owner may not bring an action under this section for breach of a statutory duty more than 2 years after the owner first becomes aware of the loss.

(7) This section is subject to the provisions of any common property memorandum adopted by the by-laws for the strata scheme under this Division, any common property rights by-law or any by-law made under section 108.

(8) This section does not affect any duty or right of the owners corporation under any other law.

1. The appeal was heard by us on 5 June 2025. The Appellant was self-represented and the Respondent represented by Counsel. Rather than following the usual procedure by requiring the Appellant to speak to his appeal first we expressed the view, on a tentative basis, that we were of the opinion that the Tribunal erred in applying s 106(6) to the Appellant's claim for an order that remedial or other work be undertaken by the Respondent. The view we expressed was that the time limit in s 106(6) was limited to a claim brought pursuant to the provisions of s 106(5) for damages for reasonably foreseeable loss suffered by the Appellant as a result of a contravention of s 106 by the Respondent.
2. In expressing this view we drew to the parties' attention the judgment of the Court of Appeal in The Owners Strata Plan no 74232 v Tezel [2023] NSWCA 35 as well as the following Appeal Panel decisions:

(1) Dart v The Owners - Strata Plan no 71849 [2024] NSWCATAP 145.

(2) Tao v The Owners - Strata Plan no 16107 [2023] NSWCATAP 327.

1. Mr Pokoney acknowledged, quite properly in our view, that the authorities quoted support the proposition that the two year time limit in s 106(6) does not apply with respect to the Appellant's claim for orders that remedial work be undertaken (often called "work orders").
2. However, Mr Pokoney submitted that it was not clear that the Appellant sought such orders because the orders sought in the application were unclear and that the Appellant had not provided any supporting information to demonstrate that he had sought such orders. For example, the transcript of the hearing has not been provided.
3. We also expressed the view that it may be the case that the Appellant does have a claim for some compensation if he can establish that some remedial work was undertaken within the two year period prior to lodgment of his application and that that work was defective causing him to suffer loss. There was evidence that the Respondent had undertaken work over a period of time, including work in or around August 2022. The merit of such a claim cannot be assessed because the Tribunal did not address that possibility.

1. We are of the opinion that the appeal should be upheld and that the application should be remitted for hearing according to law. The Tribunal erred in holding that the two year time limit restricted the Appellant's ability to bring a claim for remedial or other work orders. The authorities referred to above state that the two year time limit is limited to claims for compensation for loss.
2. The leading authority is the Court of Appeal judgment in Tezel. There, Mitchelmore JA said at [38] that the right of recovery under s 106(5) is circumscribed by the requirement that the action be brought within the period prescribed within s 106(6). At [41] her Honour stated that the loss to which s 106(6) refers is the loss suffered as a result of the Owners Corporation's contravention of s 106(1). In that case both parties accepted that a breach of s 106(1) may be of a continuing nature: [45]. In our view, an action by a lot owner requiring the Owners Corporation to remedy the breach of s 106(1) by undertaking appropriate work in the nature of repair and maintenance is an action not limited by the provision of s 106(6), it being a limitation applicable only to an action brought under s 106(5). This was the view expressed by the Appeal Panel in Tao and in Dart.
3. Because the application was not heard on its merits or by reference to the evidence but rather dismissed on the basis of an error in the Tribunal's interpretation of the extent of s 106(6), the appeal must be upheld and the application must be remitted for a hearing.
4. In coming to the above conclusion we have considered but rejected Mr Pokoney's submission that the Appellant has not discharged the obligation to demonstrate that he in fact sought work orders. The application is somewhat ambiguous, but it does not suggest that he did not seek work orders. The Tribunal at first instance clearly thought that he did so and in the Notice of Appeal he seeks such orders. We are of the opinion that he has sufficiently demonstrated that an application for work orders was a feature of his original application.
5. With the greatest of respect to the Appellant he was inclined to concentrate in the material he provided in support of his appeal on the history of his complaints with the Respondent rather than on evidence in support of the orders he now proposes. On the remittal it will be necessary for the Appellant to identify the work orders he currently contends are required (with supporting evidence) and whether he still claims compensation for loss under s 106(5) having regard to the clear limitations imposed by s 106(6). We add this comment because during the hearing of the appeal the Appellant sought to provide reasons why he had not brought the application earlier. We do not think that there is a power in the Tribunal to extend the time and that the two year time limit is a clear deadline incapable of extension.
6. At the appeal hearing the Appellant indicated that he did not seek costs of the appeal. Accordingly, the orders we make are as follows:

(1) The appeal is upheld.

(2) The Appellant's application lodged 6 September 2024 is remitted to the Consumer and Commercial Division to be heard according to law.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.