Don’t wait until it’s too
late to make a Strata Scheme building defects claim
Legal proceedings for breach of building defects
warranties “must be commenced before the end of the warranty
period” under section 18E (1)(a) of the Home Building Act
The warranty period is “is 6 years for a breach that
results in a major defect in residential building work”
under s 18E (1)(b) Home Building Act 1989.
To find out when the warranty period ends, it is
necessary ask: When did the warranty period commence?
McDougall J answered this question in the Supreme Court
of New South Wales decision of The Owners – Strata Plan
No. 69743 v TRT Constructions Pty Ltd  NSWSC 375.
The court’s ruling on when
the warranty period commenced
The court found that the property developer, as owner of
the property, engaged a builder, TRT Constructions to build
a strata title development at Blacktown.
The Owners Corporation did not know the date that the
warranty period commenced because it did not have the
building records. All it had was a final occupation
Note: a vendor of a new strata title property is
required to provide a final occupation certificate before it
can require a purchaser to complete the purchase (under r 6
Conveyancing (Sale of Land) Regulation 2010).
The final occupation certificate stated that “the
development is completed in accordance with the approved
plans and specifications and Council’s Development Consent
conditions if applicable”. It was issued on 28 October 2002.
It referred to a final inspection which took place on 21
The proceedings were commenced on 22 October 2009.
Note: the limitation period was 7 years at that time –
it is now 6 years.
Was the Owners Corporation too late to commence
S 18E (1)(c) Home Building Act 1989 provides “the
warranty period starts on completion of the work”.
The Court concluded ‘that the works were completed, at
the latest, by 21 October 2002’ for the purposes of s 18E
(1)(c) Home Building Act 1989, rather than on the
date the certificate was issued. Therefore the Court held
that the proceedings were statute barred. That is, they were
commenced too late, that is, after the warranty period had
In reaching its conclusion, the Court relied on the final
inspection note in the certificate, and not on the date of
issue of the certificate, and not on the definition of ‘date
of completion of building works’ which is found in s 3C of
the Home Building Act 1989 -
3C Date of completion of new buildings in strata
- This section applies to residential building
work comprising the construction of a new building
in a strata scheme (within the meaning of the Strata
Schemes Management Act 1996 ) where the issue of an
occupation certificate is required to authorise
commencement of the use or occupation of the
- The completion of residential building work to
which this section applies occurs on:
- the date of issue of an occupation
certificate that authorises the occupation and
use of the whole of the building, ….
Was there a building
Had it commenced proceedings in time, the Owners
Corporation needed to overcome another significant barrier
to pursue the proceedings for the building defects, which
was to prove that a building contract existed between the
property developer and the builder, TRT Constructions.
Because TRT Constructions did not admit to the existence
of a building contract, the Owners Corporation needed to
rely on inferences drawn from the Home Owners Warranty
Insurance Certificate (issued under s 92 Home Building
Act 1989 before work commences).
The Court followed the old legal maxim as stated by Lord
Mansfield CJ in Blatch v Archer (1774) 1 Cowp 63; 98 ER 969
at 65, 970, respectively, which was as follows:
Paraphrasing, his Lordship said that when the
Court weighs and assesses evidence, it must bear in mind
the extent to which it was in the power of one party to
produce and in the power of the other to contradict
evidence bearing on the fact in issue. In this case,
… it was peculiarly within the power of TRT
Constructions to adduce evidence on the question of the
existence and terms of whatever the contract was between
it and the developer. (italics added)
The Court concluded that the reference to “Multi-Unit” on
the Home Owners Warranty Certificate indicated that “it was
the construction of the strata title development”, which was
sufficient to prove the existence of a building contract.
The Certificate stated that TRT Constructions was to carry
out the building work.
Therefore the Owners Corporation was entitled to pursue
proceedings against the TRT Constructions for building
defects – breaches of warranties under s 18D Home
Building Act 1989.
This analysis will greatly assist an owners corporation
in pursuing claims for building defects, because the
existence of a building contract can be inferred from the
Certificate without the need to produce the actual building
Unfortunately in this case, the claim could not be
pursued because it was too late.