What a mess, it sounds like Cappy’s OC has been very badly advised. If someone is asking for the OC to do something or give them something, the first rule is that they pay all the costs, from the outset.
There is no way I would agree to what is proposed. Aside from anything else, has a proper valuation by a qualified valuer been done of the space, so that the owners can consider if it is being properly recompensed? That is a basic requirement – you take the value of the space once it has had the works done, subtract the amount spent on it, and that amount is how much the owner has to pay the OC.
If it did go through I would suggest lodging an application for an order invalidating the decision. Also get rid of your EC and strata manager.