Just winding this back a little, the Victorian legislation allows the owners corporation to delegate its basic powers to the committee (which is standard practice in NSW too) and it allows the committee to delegate its powers to an individual (see sections 11, 101 and 102 below). This does not include any decisions that require special resolution or unanimous votes.
If the owners corp or committee has at any point delegated powers to the chair, and this has been officially minuted, then these powers would pass to the current chair. Right now, that would be you. I hasten to add, however, that this would have to be done “by instrument” and that means it would have to have been voted on and formalised on a specific form (available here), and stamped with the Owners Corp seal. The absence of any such “instrument” makes the delegation invalid.
If, however, the former chair has been legally given delegated powers “by instrument” as a named individual, they can be “un-delegated” via a simple vote at a strata committee or general meeting, depending on which body issued the original delegation.
Otherwise, the general rule is that if there is a committee it elects the chair and the old committee ceases to have any power when the new committee is elected.
Regarding the manager, I suggest you look at Section 6 of the Owners Corporation Act to see if the current manager is in breach of the law or of their contract. If they are in breach, you shouldn’t have to pay them out.
Have a look at this Consumer Affairs Page and click on the link to Owners Corporation Complaints, download the form and fill it in, also go to this VCAT Tribunal page for official complaints about owners corp strata managers
I also suggest you contact Rob Beck of Strata Community Australia (Victoria)(info.vic@stratacommunity.org.au), tell him we sent you, and ask for his help in replacing your current deadbeat strata manager with one who knows what what he should be doing and does it.
The OC manager and the chair are doubtless covering each others backs because they know they will both be out when normal service is restored. But hang in there. You are just a couple of steps away from restoring order.
11. Power to delegate
An owners corporation may by instrument delegate any power or function of the owners corporation (other than a power or function that requires a unanimous resolution or a special resolution or this power of delegation) to— (a) the committee of the owners corporation;
(b) the manager of the owners corporation;
(c) a lot owner;
(d) the chairperson of the owners corporation;
(e) the secretary of the owners corporation;
(f) an employee of the owners corporation.
101. Functions and powers of committee
(1) Subject to this section and the rules of the owners corporation, a committee has all the powers and functions that may be delegated by the owners corporation under section 11. Note: Powers and functions that require a unanimous resolution or a special resolution of the owners corporation cannot be delegated under section 11.
(2) Sub-section (1) does not apply to a matter or type of matter that the owners corporation has determined may be determined only by ordinary resolution of the owners corporation at a general meeting. Note: See section 82.
102. Delegation by committee
(1) A committee may by instrument delegate any of its powers and functions to— (a) the manager; or (b) a lot owner.
(2) A committee may by instrument sub-delegate a power or function delegated to the committee to a member of the committee.
103. Membership of committees
(5) Subject to this Act and the regulations, the members of the committee hold office from their election until a new committee is elected.
(6) The owners corporation may at an annual general meeting or special general meeting resolve to add or remove a committee member or replace or remove a committee.