If the by-law is already registered, the law will assume it was created in good faith until such times as it is challenged under the process available in the Act.
The ways to do that are through revoking the by-law at an general meeting or, more likely, given that the beneficiary is unlikely to agree, as required for changes to a common property rights by-law, by seeking orders under Sections 24 or 150 (below).
For a section 24 revocation, you would probably have to show that the by-law would not have passed were it not for the use of the invalid proxy vote.
For a section 150 order – probably a tougher call – you would have to show that the meeting was not entitled to pass the by-law or that the by-law was essentially harsh or oppressive.
A simple challenge to the validity of the vote would have to have been made withing 28 days of the by-law being passed and even then you’d have to show that the invalid vote made a difference.
In short, NCAT is unlikely to revoke the by-law just because an invalid vote was used at the meeting. However, if the use of that vote made a significant difference, it might be worth challenging.
At this point, you might be well advised to have a chat with an experienced strata lawyer.
24 Order invalidating resolution of owners corporation
(1) The Tribunal may, on application by an owner or first mortgagee of a lot in a strata scheme, make an order invalidating any resolution of, or election held by, the persons present at a meeting of the owners corporation if the Tribunal considers that the provisions of this Act or the regulations have not been complied with in relation to the meeting.
(2) …
(3) The Tribunal may refuse to make an order under this section only if it considers:
(a) that the failure to comply with the provisions of this Act or the regulations, or of the Strata Schemes Development Act 2015, did not adversely affect any person, and
(b) that compliance with the provisions would not have resulted in a failure to pass the resolution or affected the result of the election.150 Order invalidating by-law
(1) The Tribunal may, on the application of a person entitled to vote on the motion to make a by-law or the lessor of a leasehold strata scheme, make an order declaring a by-law to be invalid if the Tribunal considers that an owners corporation did not have the power to make the by-law or that the by-law is harsh, unconscionable or oppressive.
(2) The order, when recorded under section 246, has effect as if its terms were a by-law repealing the by-law declared invalid by the order (but subject to any relevant order made by a superior court).
(3) An order under this section operates on and from the date on which it is so recorded or from an earlier date specified in the order.