In the short term you need to get a specialist strata lawyer and/or contract lawyer to write to this guy and tell him he is in breach of his contract and that you will be seeking to cancel the contract and, perhaps, get compensation.
You also need your lawyer to be writing up new terms for any contract extension – and they will clearly delineate the duties expected of the managers as well as the fees they can charge and the terms under which they can be dismissed.
The organisation that looks after on-site managers is always complaining that I am unfair to their members and yet they no NOTHING about abuses like this.
Developers selling contracts to on-site managers (then forcing them past unsuspecting owners at their first AGM) is a form of corruption. It's just another way of putting more unit owners' money into developer pockets. Whether they are good, bad or indifferent, the first thing these managers have to do is get enough money to pay off their “investment” to the developers, then they have to charge you for their services. So you, the owners are paying twice for a service that could and should be provided by reasonable people at reasonable rates.
For the managers to then “flip” an extended contract to continue this legalised larceny for another 10 years is beyond a joke.
Maybe there's a way that your OC can buy the contract and the unit that goes with it then install the manager of your choice on your terms. Wow! That's such a reasonable and fair idea that it's almost sedition in strata terms. Has anyone ever done this? Is there any reason why it can't be done?
Meanwhile, it sounds like your current incumbent is on strike. Get rid of him but don't make another 10 years of one-sided contracts with no exit clauses the price you pay.
There is a new Federal contracts law that is supposed to stop one-sided and unfair 'unconscionable' contracts … does anyone know if this would apply to on-site management contracts.