The strata manager was wrong and there’s no way you should have to pay for their bad advice. This is one of thos e cases wher you give them two options – the hard way or the easy way.
The hard way is that you go to Fair Trading, the CTTT then court, if necessary, and get an order against the Owners Corp to pay for the propertion of the work that involved essential repairs to the walls.
The easy way is that you sit down, possibly with a mediator, and agree to the amount they will pay. But the result at the end of the day will be the same – the OC has to pay and while they might argue that they should had had the opportunity to get quotes, you can say they did have the opportunity but the Strata Manager blocked it.
One other thing – I’d suggest to your neighbours that they start looking for another strata manager. The one you have doesn’t even seem to know the basics and you’d have to wonder what other mistakes they’re making.