Former Lot Owners Cannot Sue in NCAT After Selling Their Lot: Griffinchuk v Owners SP 92745 Explained

Can a lot owner sell their strata unit and then later bring NCAT proceedings against the owners corporation for water ingress, common property defects or section 106 damages?

That question was considered in Griffinchuk No 1 Pty Ltd ATF Griffinchuk Family Trust v The Owners – Strata Plan No 92745 [2025] NSWCATAP 273.

The decision is important for NSW strata law because it confirms a significant jurisdictional limitation. A person who has already sold their lot may not be able to commence proceedings in NCAT under the Strata Schemes Management Act 2015 (NSW) (SSMA) even if the loss was suffered while they were still the registered owner.

The case is particularly relevant to lot owners affected by water leaks, defective common property, mould, loss of rent, alternative accommodation costs, sale losses or other economic losses caused by alleged breaches of section 106 of the SSMA.

The practical warning is clear. If a lot owner has a potential strata claim and is considering selling their lot, they should obtain legal advice before sale and before deciding where and when to commence proceedings.

What was the case about?

The appellant was the former owner of a lot in a strata scheme. It alleged that it had suffered loss arising from water ingress and the owners corporation’s failure to properly repair common property.

The appellant sought compensation for various losses, including economic losses. Those losses were said to include expenses connected with the relocation of a lessee, sale-related expenses, commission, marketing expenses, legal fees, stamp duty on the purchase of new premises and liquidated damages payable to the lessee.

The appellant lodged an NCAT application in November 2023, but the Registrar declined to accept it because the appellant had not provided evidence of attempted mediation and they then sold their lot in December 2023.

After the appellant sold his lot he filed a further NCAT application in May 2024. By that time, the appellant was no longer the registered owner of the lot.

The Tribunal dismissed the application on jurisdictional grounds. The issue was not whether the owners corporation had breached section 106. The preliminary question was whether NCAT had jurisdiction to hear the claim at all.

The key issue: who is an “interested person”?

Section 232 of the SSMA allows NCAT to make orders to settle complaints and disputes about the operation, administration or management of a strata scheme. However, an application under section 232 must be brought by an “interested person”, original owner or building manager.

The definition of “interested person” is found in section 226. Relevantly, it includes:

• the owners corporation;
• an officer of the owners corporation;
• a strata managing agent;
• an owner of a lot in the scheme;
• a person having an estate or interest in a lot;
• an occupier of a lot.

The appellant argued that it had suffered loss while it was still the owner. It also argued that the statutory rights under section 106 had accrued while it was the registered owner and should not be lost merely because the lot was later sold.

That argument had some superficial attraction. After all, if a lot owner suffers loss before selling, why should the sale of the lot prevent the former owner from pursuing compensation?

However, the Appeal Panel upheld the Tribunal’s decision. The critical point was that NCAT’s jurisdiction under section 232 depends on the applicant having the required status at the time the application is filed.

The Appeal Panel’s decision

The Appeal Panel held that the Tribunal had correctly interpreted section 226.

The appellant was not a lot owner at the time the relevant NCAT application was filed. It had already sold the lot. Therefore, it did not fall within the definition of “interested person” for the purpose of making an application under the SSMA.

The Appeal Panel accepted that section 106 imposes a strict statutory duty on owners corporations to maintain and repair common property. It also accepted that a lot owner may have rights to damages where loss is suffered as a result of a breach of section 106.

However, that did not answer the jurisdictional question. The existence of an accrued right to claim damages does not necessarily mean NCAT remains the correct forum after the applicant has ceased to be a lot owner.

The Appeal Panel considered the Tribunal’s reasoning to be orthodox and found no error in the conclusion that the appellant needed to be a lot owner at the time the NCAT application was commenced.

Does selling the lot destroy the damages claim?

Not necessarily. One of the important distinctions in the decision is the difference between the existence of a legal claim and the forum in which that claim may be pursued.

The Tribunal accepted that the former lot owner’s rights were not necessarily extinguished. However, it held that NCAT did not have jurisdiction to determine the claim because the appellant was no longer an “interested person” under section 226 at the time of filing.

In practical terms, this means a former lot owner may still have to consider bringing any damages claim in a court of competent jurisdiction rather than NCAT.

That distinction matters. NCAT is generally designed to be more accessible, quicker, cheaper and less formal than court proceedings. Court proceedings can involve greater cost, more formal pleadings, stricter evidence rules, greater adverse costs risk and more complex procedural requirements.

For that reason, lot owners should not assume that they can safely sell their lot first and work out the claim later.

Claims under Section 106 of the SSMA

Section 106(1) requires an owners corporation to properly maintain and keep common property in a state of good and serviceable repair. Section 106(2) requires renewal or replacement of common property fixtures and fittings and personal property vested in the owners corporation.

Section 106(5) allows an owner of a lot to recover damages from the owners corporation for reasonably foreseeable loss suffered as a result of a breach of section 106.

The Griffinchuk decision does not remove the substantive right to claim damages under section 106. Rather, it clarifies that NCAT’s power to hear the claim depends on the applicant having standing under the SSMA when proceedings are commenced.

The timing problem for lot owners

The timing problem is simple but serious. A lot owner may suffer water ingress for years. The owners corporation may fail to repair the common property. The lot owner may eventually decide to sell because the problem is too difficult, too stressful or too expensive. After selling, the former owner may then want to claim compensation for loss suffered during ownership.

After Griffinchuk, that former owner may face a jurisdictional objection if they commence proceedings in NCAT after the sale.

The owners corporation may argue that NCAT has no jurisdiction because the applicant is no longer an owner, occupier or person with an estate or interest in the lot.

If that argument succeeds, the former owner may need to commence again in court. That can cause delay, additional cost and limitation risks.

What if proceedings are commenced before sale?

The position may be different if the lot owner commences NCAT proceedings while still the owner and then sells the lot after proceedings have already been commenced.

The Appeal Panel distinguished cases where the applicant was still a lot owner at the time proceedings were commenced. This distinction is important.

The safest course for a lot owner who is selling, and who wishes to pursue a strata claim in NCAT, is to obtain advice urgently and consider commencing proceedings before completion of the sale.

However, timing should not be handled casually. There may also be mediation requirements, limitation periods, evidence issues, costs consequences and strategic considerations.

Mediation and section 227

The case also highlights the importance of mediation requirements.

Section 227 provides that certain applications cannot be accepted by the Tribunal unless mediation has been attempted, a party has refused to participate in mediation, or the Registrar considers mediation unnecessary or inappropriate.

In Griffinchuk, the appellant’s earlier attempt to lodge proceedings was not accepted because proof of attempted mediation had not been provided.

That became highly significant because the appellant sold the lot after the Registrar’s rejection and before the later application was filed.

The appellant tried to argue that the Registrar’s rejection of the earlier application was affected by jurisdictional error. However, the Appeal Panel held that it did not have power to review that Registrar’s decision in the internal appeal because it was not an internally appealable decision of the kind identified under the Civil and Administrative Tribunal Act 2013 and the Civil and Administrative Tribunal Rules 2014.

The practical lesson is that procedural steps matter. A lot owner should not assume that an attempted filing will preserve rights if the application is not accepted.

Practical lessons for lot owners

The decision provides several important lessons for lot owners.

1. If you have suffered loss from common property defects, obtain legal advice early from experienced strata specialist lawyers.
2. Do not wait until after selling your lot before deciding whether to commence NCAT proceedings.
3. Identify whether mediation is required and complete that step properly.
4. Keep all evidence, including photographs, videos, expert reports, correspondence, invoices, rent records, agent records and sale-related documents.
5. Consider whether the claim should be brought in NCAT or in court.
6. Understand that limitation periods still apply. Section 106(6) now provides that an owner may not bring an action more than six years after first becoming aware of the loss.

Practical lessons for owners corporations

The decision is also important for owners corporations.

Owners corporations facing claims from former lot owners should consider whether NCAT has jurisdiction. If the applicant sold the lot before filing the NCAT application, there may be a strong preliminary jurisdictional objection.

Conclusion

The key point of the decision is that a former lot owner who has already sold their lot may not be an “interested person” under section 226 of the SSMA and may therefore be unable to commence NCAT proceedings under section 232 after the sale.

The decision does not necessarily extinguish the former owner’s substantive rights. But it may force the former owner into a court rather than NCAT.

For lot owners, the message is clear. Do not leave damages claims until after settlement. If you are considering selling your lot and you have a water ingress, building defect or section 106 claim, obtain legal advice before sale.

For owners corporations, the case provides a potentially powerful jurisdictional answer to NCAT claims brought by former owners. But it does not reduce the owners corporation’s ongoing duty to properly maintain and repair common property.

Pobi Lawyers assists lot owners and owners corporations in NSW strata disputes, including section 106 claims, water ingress disputes, unreasonable refusal of by-law claims, compulsory management claims, NCAT proceedings and strata litigation. We also advise on strata by laws Sydney matters and related strata governance issues. 

Disclaimer 

This article is provided for general information purposes only. It does not constitute legal advice and should not be relied upon as such. Pobi Lawyers accepts no responsibility or liability for any loss arising from reliance on the information contained in this article.