Gosh this is messy, so just a few thoughts:
– in respect of the two EC members who made the NCAT application that is the subject of mediation, I suggest that they have a conflict of interest so therefore should be excluded from any considerations/decisions relating to the matter. That is – in their capacity as EC members. You are right, the EC members have to act in the interests of the OC as a whole.
– if that is the case, that leaves you with one EC member. That is not a quorum for the purposes of making an EC decision (technically you could argue that it might be but let’s leave that)
– going back to the Secretary advising that they didn’t want to go to mediation – a single member of the EC can’t make a decision on behalf of the EC, they have to meet and make a decision. It seems that didn’t happen. So the Secretary didn’t have the authority to do that.
– the strata manager is wrong, you have to have an EC meeting to make a decision. The requisite 72 hours notice needs to be given, with the proposed resolutions notified to all owners in accordance with the Act.
– the other owners can object to a proposed resolution of an EC, where notice is given of that proposed resolution, by owners who own at least one third of the entitlements giving notice to the EC that they object to the decision. Any purported decision then has no effect.
Of course, here no notice was given, but if it had been, then if you had the numbers then notice of objection could have been given.
In summary – there was no valid decision, I doubt whether two of the EC members could have participated in any “decision”, and given the nature of the matter and the complexities, it should have gone to the OC (all of the owners) for a decision.
To that extent – on one analysis you could say that the advice given by the Secretary has no force, but that may be a moot point – has the time passed for the mediation?