Builder wins appeal over strata defect orders; six-year time limit case sent back to be re-heard (NCAT, 2026)

What happened

Between 2013 and 2014 the builder, Raysons Constructions Pty Ltd, built a 59-lot strata building at Meadowbank in Sydney. The final occupation certificate was dated 15 July 2014 and was issued by Ryde Council on 18 July 2014. The developer of the scheme was Wekan Pty Ltd, which owed the owners corporation its own set of statutory warranties, separate from the builder's.

The owners corporation said the building had defects: cracks in various concrete slabs, movement at a ground floor slab joint, and water getting in at several parts of the building. Records before the Tribunal showed the strata manager had emailed the builder about cracks in the basement car park in December 2014, that lot owners had raised water ingress and balcony drainage from November 2014 onwards, that an engineering firm (Freyssinet Australia Pty Ltd) reported on car park slab cracking in August 2019, and that in January 2020 a strata committee member and the strata manager exchanged messages about whether the car park slab cracks could be considered a defect. A report by RHM Consultants, based on inspections in early May 2020, was issued in around June 2020. The builder returned to site and some rectification work started on 26 August 2020, and in about mid-September 2020 the builder issued a progress report on defect rectification works.

The owners corporation's application was dated 26 November 2020 and filed with NCAT on 27 November 2020. That was outside the six-year period for a breach of warranty resulting in a major defect, which ran from 18 July 2014 and ended on 18 July 2020. It was inside the further six months allowed by the Home Building Act (to 18 January 2021), but only if the breach became apparent in the last six months of the warranty period, that is between 18 January 2020 and 18 July 2020. The developer went into external administration during the proceedings and took no further active part.

After a two-day hearing in September 2021, written submissions, and further supplementary submissions in 2023, the Tribunal decided on 17 July 2023 that the owners corporation had the benefit of the extra six months because it became aware of the breaches referred to in the RHM Consultants report in the last six months of the warranty period. The Tribunal then worked through six tables of items, found that 15 listed items were major defects, and ordered the builder to rectify them. This appeal is the second time the matter has reached the Appeal Panel; it came back to the Appeal Panel after the Supreme Court of NSW dealt with the first Appeal Panel decision.

What each side wanted

The owners corporation claimed damages for breach of the statutory warranties implied into residential building work by section 18B of the Home Building Act, and at the hearing accepted (then pressed for) a work order requiring the builder to fix the work instead. It argued the warranty period ran from the occupation certificate, that the extra six months applied because it only learned of breaches of warranty from the June 2020 report, that it was the builder who had to prove the claim was out of time, and that the waterproofing and slab items were "major defects". The builder argued the opposite on each point: that the owners corporation had to prove it fell within the extension, that the owners corporation had known about the cracking and water problems since 2014, that the items were not major defects because there was no evidence they caused or were likely to cause the building or part of it to be uninhabitable, destroyed or at threat of collapse, and that if the claim was in time the Tribunal should award damages rather than order work, on the lower costings of the builder's quantity surveying evidence.

What the tribunal decided

The Appeal Panel granted leave to appeal and allowed the appeal. It ordered that the proceedings be remitted back to the Tribunal for determination in accordance with its reasons, so the claim is to be decided again rather than finally dismissed or allowed.

On costs, the Appeal Panel ordered the respondent (the owners corporation) to pay the appellant builder's costs of the appeal on the usual basis, as agreed or assessed. No figure was set. If either party wants that costs order varied, it must lodge a miscellaneous matters application with the Appeal Panel Registry and serve it on the other party within 14 days of the decision, and the Appeal Panel will then issue further orders and directions.

Why the tribunal decided it that way

The Appeal Panel began by setting out the statutory scheme, because the time limit decides whether NCAT can hear a claim at all. Section 18B of the Home Building Act implies warranties into every contract for residential building work: that the work will be done with due care and skill and to the contract plans and specifications, that materials will be fit for purpose, that the work will comply with the Act and any other law, that it will be done with due diligence and in time, and that a dwelling will be reasonably fit to live in. Section 18D gives later owners, including an owners corporation, the benefit of those warranties. Failing to comply with the Building Code of Australia or the National Construction Code breaches the warranty in section 18B(1)(c), because the Code is given effect as a law of NSW; the NSW Fair Trading Guide to Standards and Tolerances is not a law, but is relevant to whether work was done with due care and skill.

Time is controlled by sections 3C, 18E and 48K. For a new strata building, the warranty period starts on completion, which section 3C(2)(a) fixes as the date of issue of an occupation certificate authorising occupation and use of the whole building. The period is six years for a breach that results in a major defect and two years in any other case. If the breach of warranty becomes apparent in the last six months of that period, section 18E(1)(e) gives a further six months, and section 18E(1)(f) says a breach becomes apparent when a person entitled to the warranty first becomes aware, or ought reasonably to have become aware, of the breach. Section 48K(7) says the Tribunal has no jurisdiction over a statutory warranty claim lodged after that period ends. A "major defect" under section 18E(4) has two parts: a defect in a major element of the building (such as a load-bearing component, a fire safety system or waterproofing) attributable to defective design, faulty workmanship, defective materials or a failure to meet the structural performance requirements of the Code; and a defect that causes, or is likely to cause, the inability to live in or use the building or part of it for its intended purpose, its destruction, or a threat of collapse. On the authorities the Appeal Panel set out, the consequence does not have to have happened yet and need not be imminent, but there must be evidence from which the Tribunal can conclude it is likely.

The Appeal Panel stressed a distinction drawn by the Supreme Court in this same dispute: a "defect" is not the same thing as a breach of a statutory warranty. Section 18B never uses the word "defect"; it appears in section 18E, which deals with the time limit. Mixing the two up was the subject of substantial criticism of both the first Tribunal decision and the first Appeal Panel decision. Being aware of a problem in a building is therefore not automatically the same as being aware of a breach of warranty, which matters when deciding when the clock started and whether the extra six months applies.

The Appeal Panel then set the first Tribunal decision out in unusual detail, because the adequacy of its reasons mattered to the grounds of appeal. It noted that the Tribunal said an authority "seems to quite plainly state" that the builder carried the onus of proving a lack of jurisdiction without ever making a finding on the point; that it discussed the Design and Building Practitioners Act at length although that claim had been withdrawn; that on one ceiling item it found a major defect in a bedroom while reasoning about the kitchen and then left the item out of its own summary; and that on several items it recorded the owners corporation's expert evidence without dealing with the builder's. The published text available here stops partway through the Appeal Panel's review of the individual defect items, so it does not contain the paragraphs in which the Appeal Panel explained which grounds of appeal succeeded.

What this means if you are in a similar position

If you are in a similar position, this decision shows how strictly the Home Building Act timetable is applied, and that it is a question of the Tribunal's power rather than mere procedure. For a new strata building the clock starts on the occupation certificate for the whole building, not on settlement, handover or when owners move in. Six years applies only where the breach results in a major defect as that term is defined; everything else gets two years. The extra six months is narrow: it only helps where the breach of warranty became apparent inside the final six months of the period.

The decision also shows what evidence is needed to call something a major defect. It is not enough to show water is getting in or that a slab is cracked. There must be evidence linking the problem to a major element of the building and to one of the listed consequences, and that consequence has to be shown as likely, even if it has not happened yet. Expert evidence usually carries that, but owners and occupiers can also give first-hand evidence of what they have seen, such as staining, mould, water coming in during rain, and photographs. Where an expert does not address the statutory test, a tribunal may have nothing on which to make the finding.

It is a reminder too that the way a decision is reasoned can be appealed, not just the result. Leave to appeal and a rehearing can follow where findings are made without dealing with the opposing evidence, or where the question of who has to prove what is left unresolved. In this kind of dispute most people start with a written notice or demand to the other side setting out the items and what they want done, and only make a tribunal application if that does not resolve it.

How to apply: our step-by-step guide to a NCAT application. More decisions: NCAT cases and builders and building defects.

Source: Raysons Constructions Pty Ltd v The Owners – Strata Plan No 87003 [2026] NSWCATAP 324 (read the full decision). This summary was prepared from the published decision for general information. It is not legal advice, and the tribunal’s own reasons are the authoritative record.