I've had similar thing happen to me, ebay don't care because they have already been paid. The only other option is the legal path but because you had no tracking on the item there's little point. Cut your loses, block the buyer and move on.

Without tracking you cannot prove they did get the item. I would use Click and Send postage system in the future. It has tracking and it's a little bit cheaper than regular postage as well.

www.clickandsend.com.au has all the details.