drakes – even if the damage to Common Property within your Lot is due to settlement of the building, and I agree that’s yet to be proven, I don’t believe that your Owners Corporation’s Special By-Law (SBL) obviating its responsibility to properly maintain and repair that part of its Common Property is legal.
The Superior Act (to any SBL) is in this instance the NSW Strata Schemes Management Act (1996) which at Sect 62, Clause 3(b) provides that whilst an Owners Corporation (O/C) can resolve by way of a Special Resolution at a General Meeting not to maintain a particular item of its Common Property, that’s only permitted if, amongst other things, that decision will not adversely affect the structural integrity of that part of its Common Property or detract from its appearance.
I believe that you could substantiate an argument that as the effect of this SBL of your O/C is adversely affecting the appearance of their wall within your bathroom, and that their wall’s structural integrity is compromised such that leakage through it could damage both other areas of its Common Property and other Lots, and because it’s in conflict with the provisions of a Superior Act the O/C should immediately move to repeal its SBL and to concurrently commence all necessary investigations to limit the impacts of settlement (if that’s what it’s proven to be) and to commence repairs to its wall within your Lot and any others similarly affected.
Just in case your O/C is unconvinced of your argument, perhaps seek the support of other similarly affected Owners before advising it that you may be collectively forced to seek an Order by an Adjudicator of the NSW Civil and Administrative Tribunal to have its SBL invalidated on the grounds that it did not have to power to make it.
When things (apart from the wall) start moving, if the tiles there aren’t those originally fitted to your bathroom when the building was completed, then your O/C could hold you responsible for the replacement of those when its work is completed, and even though the fairness if not the legality of that too is doubtful in this situation, I wouldn’t push it.