Ok – so according to them, the agreement has three terms:
1. at will, to be terminated with three months notice by either party
2. nominally one year, expiring at AGM
3. three years (with option for another three years etc.)
I don’t see how you can have an agreement that has three different terms, it doesn’t make any sense. An agreement can only have one term, you can’t have a number of options, and they can’t be taken cumulatively which is what the manager is suggesting.
In respect of the penalty, on my reading that is not correct because Clause 15 refers to “the term (if any)”. And you can’t say that all three term options apply at the same time. That is, for example if you terminated under option 2, then option 3 doesn’t apply.
I am not sure what you would be applying for mediation for, I suggest your next step is calling the Department of Fair Trading and telling them what the strata manager is saying and ask them what your options are. Ideally you should consult a lawyer, it would probably not cost you that much to get a letter sent to the strata manager which is likely to make them pull their head in. Bear in mind the strata manager is not a lawyer (so far as I know), and they don’t seem to know how agreements work.