Actually, that’s what the diagram on p34 of Strata Living says.
Why is it falling out of favour?
Because whenever the CTTT boss appears on TV, she implies (or actually says) you have to go through mediation first.
That’s also what you’re told if you ring CTTT for advice.
So, the answer to your question is … misdirection from the CTTT.
So you go to mediation even for a breach of By-Laws.
It goes something like this.
Complainant: I want the offender to obey the By-Laws all the time.
Respondent: I don’t ever want to obey the By-Laws.
Mediator: I think we’ve reached a compromise. You only have to obey the By-Laws half the time.
Gavel: Bang!