A further option, that may de-escalate the situation is to refer the resident to NCAT and to make a formal complaint there, and encourage an NCAT mediation session.
An application to NCAT must be related to an aspect of strata law or a by-law that has been allegedly breached. In any case, applying for mediation is pretty much an escalation as it is effectively reporting the miscreant to the authorities.
To be fair, I think the OP may be kidding themselves if they think they can deal with the situation without escalating the tension. On the other hand, tackling it head on and reaching a solution may rip off the band-aid and allow things to return to normal fairly quickly.