I think we’d have to know more details about the water damages and how they occurred.
They are not always due to a fault of the OC. Especially in VIC.
I’m assuming it was not due to a fault of the OC. In which case an affected lot owner can claim on any insurance policy available to them. If they use the OC’s strata building insurance, they’d have to pay any excess.
To know the circumstances of how an OC could agree to a settlement without the OP’s involvement, I’d be asking that question to the Strata Manager, the insurance broker or the insurer itself.