Strata law in Victoria has a few quirks that you won’t find anywhere else in Australia but Owners Corporation Act is clearly designed to allow owners corps to set their own standards for behaviour.
Rather than load up the Act with rules and restrictions, it lets strata schemes set their own parameters (within reason) through their by-laws but has a ‘catch-all’ law that if your schemes’ by-laws don’t cover a specific issue, then the model by-law provided by the Government does apply.
So, unless you have one that’s substantially different, the following by-law would apply:
5.2 Noise and other nuisance control
(1) An owner or occupier of a lot, or a guest of an owner or occupier, must not unreasonably create any noise likely to interfere with the peaceful enjoyment of any other person entitled to use the common property.
But that gets us into the whole grey area of what is “reasonable”. It strikes me that by installing tiled floors without adequate noise insulation (which you demonstrably have) the developer is guilty of selling you and your neighbours something that is not fit for purpose. In Victoria, there is a time limit on structural defect claims of six years and non-structural defects of two years.
Assuming flooring is non-structural, I’d guess that time limit is already up for you or your upstairs neighbour to demand a properly insulated floor but if not, I would be looking very closely at that option.
Another option might be for the owners of the above apartment to claim that the common property flooring is defective and demand that the Owners Corporation fix it.
Whatever way you decide to go, there is a three stage complaints procedure in Victoria, which requires that matters be address in very specific ways via certain forms (available if you follow the above link).
In the first stage you have to make a complaint on the specific form and the Owners Corp must respond in wiring, even if it is to tell you that they are taking no action and why that is their decision.
You can then apply for mediation at Consumer Affairs Victoria (or via your strata plan’s internal dispute resolution system). If that doesn’t work, you can apply to the Victorian Civil Administration Tribunal (VCAT) for an order.
That said, these are lengthy and potentially distressing procedures that may cause you more grief than the original problem. It sounds as if your neighbours are at least prepared to listen so how about approaching them with a proposal to share the cost of carpetting the floor (the most effective form of insulation around) or even of installing an acoustic ceiling above the worst affected room in your unit.
But before you do anything, it might be well worth talking to a lawyer who specialises in Victorian strata law – just to see what your realistic options are.