You are being railroaded by a Fair Trading mediator who has overstepped her authority and a supine EC led by an all-too-familiar figure, the autocratic chairman.
You need legal advice but don’t expect to get it for free. However, it will cost less that re-carpeting your upstairs neighbour’s place, both financiall y and it term of persona satisfaction.
If you want a good strata lawyer, send an email to Suzie Broome of our sponsors Makinson & d’Apice (sbroome@makdap.com.au) with a link to this page so she can see the whole saga.
And ask your chairman if he is aware that he is well out of line in supporting someone who is in clear breach of your by-laws. Suggest that once you have dealt with chummy upstairs, you might look at recovering your costs (and some extra payment for years of distress) from the Owners Corp because of the bad management by him and his pliant strata manager.
He’d better make sure the EC insurance is up to date or he could be called to account personally for his incompetence and far from impartial decisions.
The argument about not rocking the boat in case it affects property prices is so old hat – people are suspicious when they look at buying into a building that has had no problems. There is no such place on the planet and the savvy purchaser will run a mile when they sense that there’s a culture of cover-up.
And as for getting used to the noise – that’s a choice that he’s made but you don’t have to. Maybe his upstairs neighbours have better insulation, maybe he’s a bit deaf, maybe they take their shoes off. Whatever, it has nothing to do with you.
It sounds to me like these people are having lend of you and your EC is perilously close to being dysfunctional. Stop offering money, talk to a lawyer and bring these tinpot despots into line.