Firstly, the Strata Manager can’t give permission to change Common Property even if they have delegated powers. This can only be done at an AGM – so regardless of what the former SM said, the owner did not have permission to to this.
The question remains, what do you do next. If it changes the outward appearance of the building for the worse, the Owners Corp has the right to tell the owner to reinstate the original fittings at their own expense. If you don’t mind the new fixtures, you still need to be sure that the Owners Corp will not be held liable for repairs etc in the future, especially if this is an expensive installation (and might have been shoddily installed). I f you just let this go, you may find in the future that you have to pay for expensive repairs to a balcony that you didn’t want changed in the first place.
At the very least I would be asking the owner to submit a special resolution by-law at an Extraordinary General Meeting taking full responsibility for the balcony work now and in the future. I would also expect them to pay the cost of having the by-law written by a lawyer and the cost of the meeting to approve it.
If the owner refuses to do any of these things, I’d hold an Executive Committee meeting to issue a Notice To Comply ordering them to reinstate the balcony to its original state.
Your Owners Corp can’t be held responsible for work done under a verbal agreement that may or may not have been reached with a Strata Manager who did not have the right to make such an agreement in the first place.
Even if you don’t mind the new balcony, you have to establish that responsibility for its upkeep now rests with that owner and the only way to do that legally is to pass a special resolution.