It is peculiar. There can be serious issues arising from moving a kitchen. There is a reason why kitchens and bathrooms are located in the same place in a block, aside from anything else how would you like a kitchen over your bedroom or living room? We had an owner who wanted to put a toilet in what is essentially a pantry at the entrance to his apartment, we said no for a variety of reasons including the plumbing, the space being too small, and not wanting a toilet directly adjacent to the foyer,
They definitely need Council approval, and they may not get it, depending on the size and configuration of the apartment.
I don’t think there is anything wrong with the owners refusing approval, provided they have reasonable grounds to do so. The water usage reason might be a bit thin, but certainly relocation of the kitchen is a valid concern, loss of amenity for other owners etc. Use of clothesline and lift is also a bit of a stretch. I am sure you can come up with better reasons than that.