An update to this. Australia Post have 'closed' their investigation in to this and concluded that 'they have fulfilled their contract' by delivering the item. They confirmed with me today that the buyer had taken the parcel to the Post Office but they concluded there was no evidence of tampering (it is very strange they could come to this conclusion given the box had been opened but that is another matter altogether). They also confirmed that there were no 'discrepancies' with the item whilst in transit suggesting that it weighed the declared weight, was not smashed and leaking in transit, and that the buyer confirmed delivery and signed for the parcel. They have decided that they are not going to refund the buyer as they believe the parcel was delivered. 

They have also advised that they will not compensate even though we the seller insured the item to it's value. What would you guys suggest in going forward from here? How would eBay likely resolve this if it went to dispute? I asked AP how they could come to this conclusion when it is the buyer's word against the delivery driver and they quoted the above that they had delivered the item, it was signed by the buyer and no damage to the item had been marked on the parcel when in transit. Any advice greatly received.