Felix – it’s a grey area that others may wish to comment upon, but in my opinion a non-compliance with S65A of the Strata Schemes Management Act would arise if anything has, without the prior written consent of the O/C, been placed through and / or been permanently attached to a common wall by an Owner; that is irrespective of whether that’s on the inside or outside of that wall.
No matter the condenser unit of the air-con. has been placed on as opposed to being fixed to the balcony floor (Common Property), the electrical cabling, and refrigeration and drainage pipework has been placed through and then attached to common property, and that’s a non-compliance that your O/C should address retrospectively by way of the Special By-Law that I previously suggested, that should cover all components of aircon. installations by Owners.
As I’ve said in the past, my opinion about “wink and nod” arrangements such as your E/C has used is that they’re all good until something hits the proverbial fan, at which stage things almost always go pear-shaped in a hurry!
Any Strata Manager who’s worth half what your O/C’s paying them should be able to assist in properly resolving this issue, so maybe start there.