The part of the Act you cite says this:
(3) Decisions to have no effect if opposed by more than specified owners
A decision of a strata committee has no force or effect if, before the decision is made, notice is given to the secretary of the owners corporation by one or more owners, the sum of whose unit entitlements exceeds one-third of the aggregate unit entitlement, that the making of the decision is opposed by those owners.
So this is saying that if the owners of lots that have one-third or more of unit entitlements oppose a motion on an agenda (in writing, collectively, one might assume) then the agenda item can’t be approved.
I don’t see where the confusion is except you may be wondering how you go about this. Or maybe you don’t understand what unit entitlements are.
Perhaps if you tell us what it is you don’t understand we can explain better.
Regarding the costs, there is provision in the Act for the Tribunal to award costs against the Owners Corporation or the committee and specify that these costs have to:
a) Be raised by a special levy
and
b) That levy should exclude the people on the “winning” side.
As for your last question about another property that unknowingly committed a breach, people acting in good faith are generally exempt from liability for further penalties but if you have been told you are doing something wrong but continue to do it, those personal exemptions evaporate.
I would say that you and your neighbours need to hire an experienced strata lawyer as a matter of urgency and then get them to make sure costs are awarded against the other side.