Fundamentally, the shed builder is not using their car space for what it was intended (in the DA of the block) and is also preventing their neighbour fron reasonable access to their space.
The car space may not be common property but the concrete slab on which it sits is, so anything attaching the shed to the floor, walls or ceiling is in breach.
There is no simple cure for selfish stupidity so you should first of all establish protocols for what people can and can’t do in their car spaces – then enforce them – before it all gets out of hand