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I have now taken legal advice on this matter. Here it is:
The external walls are part of the building, and therefore are common property owned by the owners corporation. The Strata Law permits the walls to be touched.
The Strata Law permits cosmetic renovations. In particular, section 109 of the Strata Schemes Management Act 2015 permits cosmetic work, which is defined to include painting (Section 109(2)(c)).
SECTION 109 COSMETIC WORK BY OWNERS
(1) The owner of a lot in a strata scheme may carry out cosmetic work to common property in connection with the owner’s lot without the approval of the owners corporation.
Note: the only limitations are as set out in Section 109(3):
(3) An owner of a lot must ensure that:
(a) any damage caused to any part of the common property by the carrying out of cosmetic work by or on behalf of the owner is repaired, and
(b) the cosmetic work and any repairs are carried out in a competent and proper manner.
Note: There is no limitation on colour or on what surfaces are to be painted or how the surfaces are to be painted.
Turning to the By-Law, I assume that it is along the lines of Standard By-Law 12 –
12 Appearance of lot
(1) The owner or occupier of a lot must not, without the prior written approval of the owners corporation, maintain within the lot anything visible from outside the lot that, viewed from outside the lot, is not in keeping with the rest of the building.
(2) This by-law does not apply to the hanging of any clothing, towel, bedding or other article of a similar type in accordance with by-law 14.
That by-law does not apply to painting. It applies to window coverings and applications, signs, etc.
Even if it did apply to internal painting, or if your strata scheme’s by-law applied to internal painting, it would be invalid because it conflicts with the owner’s rights under section 109.