If you dont sell, you will never pay CGT or selling fees.
I assume you are after the trapped equity in the property to do other deals.
Think of the following 2 examples dealing with the same property, purchased for AU$250K now valued at AU$400K with AU$150K in equity (assuming interest only payments).
1. Selling:
AU$400K less selling costs with a REA ~AU$10K = AU$390K less the mortgage of AU$250 = AU$140 'profit' taxed on 50% at your 'actual' tax rate (assume 30%) = AU$140K/2 = $70K less 30% tax (AU$21K). Total costs = AU$10K REA selling fees + AU$21K in tax = AU$31K from your origional captial gain of AU$150K leaving you with AU$119K; thats 79.33% after costs.
Now when you get another loan you will also incure additional lening costs and have to jump thru the banks lending criteria again with ~AU$600 to AU$1,000 in fees. 
2. Retain the property and borrow up to 80% (min) of the current value of the property.
Using the same starting figures you could borrow 80% of the current value (AU$400K without paying for Lender Mortgage Insurance- LMI) = AU$400K x 80% = AU$320K less the origional loan of AU$250K = additional accessable equity of AU$70K.
The AU$70K will allow you to use this as a 20% deposit on an investment property with a purchase price of AU$350K. 

Unless this property is an underperformer I would hold onto the origional property and use BOTH properties to gain wealth.
ie: assuming a steady 7% capital gain on BOTH properties, they will perform like so in the next 12/24/36 months.
$428K/$$375K in 12 months, then $458K/$400K in 24 months and $$490/$$429K in 36 months. This gives you a additional combined equity of $$53K then $108K then $169K.
Assuming an average property price of ($400K plus $350K = $375K) plus standard property price increases of 7% pa = $400K at the end of the first year, then $430K then $460K.
 Assuming that you can again release the increased trapped equity, you could afford to purchase a 3rd property sometime between 24 and 36 months. ie: At the end of the 24 months you have 2 properties worth $858K x 80% = $687K less the origional 2 loans of $250K and $280K (pruchase price of $350K less 20% deposit of $70K which you borrowed against your first investment property by release the trapped equity) [$$530K] = $157K available to release again etc etc.

Unless the property is underperforming, by selling, paying costs and paying taxes you are reducing your ability to leverage the increased equity in your investment property.
You want the equity to be released.
I suggest that the investment properties be placed in a family trust; that way you can distribute the 'income' to members of your family by splitting its income using the first $6K tax free amount for EACH tax payer. But remember, the trust may never make a tax profit unless and until you eventually sell (either to pay down your loans or to gain access to your 'property retirement fund'. If its not sold, there is no capital gains tax: you are delaying the tax for some future distant date. You can make much better use of your funds than the tax man can.
Have all of your properties revalued at least every 12 months (6-9 months if a particular property takes off) and use the increased equity ASAP.

The re-letting fee should be no more than $15; any more and they are ripping you off. They have completed no additional work for wich you are already paying them 8-10% management fee of which re-letting is a normal part of their duties.
You should also see your origional contract for said fee.
Give them a choice, refund the fee or find a new client ie: sack them ASAP.

have you seen a registered copy of any sub-division plan? If not, then they have not completed their side of the deal so no settlement is yet required.
Iwould still seek compensation should they wish to push the matter and delay as long as possible.
Is the property a good deal? Can you make money on it by selling/flipping BEFORE the date of settlement? If so, go for it and still make some $.

Remember, every time you contact a [your] lawyer it costs 'you' money. Every time their lawyer gets involved, it cost 'them' money. So, if you send a letter to the seller [NOT their lawyer], they will probably (in the end), send it to their lawyer, all of which takes time (using the normal postal system).  This can run into weeks and months as you go back and forth with questions, answers and clarifications…something they will not wish to drag this out over months. This could drag out the whole process until Jan 2012, your original settlement date.

Who is paying and instructing the conveyancer? If its you, instruct them to stop any further action unless and until this matter is sorted out and they receive written instructions from you [via registered post]. 

The suggestion as to going to court is only as a delaying tactic…which will cost them lost interest from now until settlement. If you loose, you will be liable for your [legal] costs, their costs, plus interest.  But I suggest that it will never come to that.
Depending on the purchase price of the property, it will probably end up in the District Court (mid level in the legal system).
Going to court also takes a LOT of time away from everyone's normal business (making money) which is NOT paid for/compensated for by the courts (except for the lawyers 'reasonable' fees, as decided by the court).

You can preempt them as well by making an offer [with an end date for acceptance] to settle (at X less the $15-20,000). If it looks like going to court, make this offer ASAP; this will take the wind out of their sails and be looked upon favorably by the courts.
Most courts will not allow costs if you made a 'reasonable' offer (say within 10% of what may be expected) which is rejected by the other party but later found to be adequate. Courts do not look fabably on any party (th seller) that fails to accept a reasonable offer and ends up wasting the courts time.
Most developers are also looking to settle each stage ASAP so they can get the cash and bank loans to complete the entire project; they longer the delay on your property, the longer the delay on completing stages 5 and 6 [with how many properties?].

Sounds a little spongy to me…..check it out quick as a change of date of 12 months is not 'helpful'.

I would have thought that if you have a contract with a [fixed] settlement date in 2012 then that is the date and not a day sooner UNLESS you agree (in writing)?
Re-read your contract and tell us what is says please.

You should claim back against the tenants bond to FULLY repair the damage (no matter how it is caused). Damage is damage, even if it was accidental and must be paid for by the tenant.
I would be asking when this damage occured as it shoul dhave been picked up in the 3 monthly property inspection reports and not left until the end of a lease.
I am assuming that this is NOT 'normal wear and tear', a term agents like to use a lot so that they do not have to do any work via a follow up with the exiting tenants and retaining the bond.
The agent should NEVER release the bond without your approval; if they have, then the agent will be held accountable for the costs to repair. Its not 'compensation' that you are after, its therepair of the damage caused so as to bring the bench top back to a 'as new' (after taking in fair wear and tear) condition so that you can rent the property out again.
By a 'relationship' are you suggesting a 'conflict of interest' with the agent?  Ask the agent what they mean by a 'relationship'.
I would also consider that any lost rent be claimed during the time that it takes to complete all repairs as the property has not be returned in a 'reasonable rentable condition'.

Make sure they offer a guarantee. ie: If the job is delayed due to the plans being wrong or incomplete then they should pay for the delay costs of your builder and lost of profits (rent) or additional interest costs.
A good drafting business will/should have insurance and be more than willing to stand by their product; if not, look elsewhere.
They should also be able to provide a materials list (with costing if possible).

I aggree, do NOT rush into an offer.
As for the clause: "subject to finance" make sure it reads.."subject to finance on terms acceptable to the buyer". To do otherwise would leave you liable if th ebank says YES but on terms that are too expensive to you.

While you may be able to finance it 100%, its not the best use of your cash.  Cash is king and can be used in other areas while the building is going on to generate additional funds to add to your kitty.
Selling off the plan is the best way to get finance from the banks to save your cash. The deposit from the end buyers also adds to your cash flow to pay your builders/sub-contractors.
You MUST get a project manager to deal with the day to day planning to co-ord the workers on site.

Have you visited the local town council yet?
Do you have a copy of the Title with the owners details on it?
Have you arranged a sit-down with the seller to see if he is prepared to offer you an option to purchase (to save your cash and the need to pay transfer tax/stamp duty)? At ~$40K thats a nice chunk of change/cash of better use in your pocket = $40K profit; PLUS you will keep the ~$40K/3 = $13K+ off the selling price, creating a better deal for the end buyer = easier to sell = cash in your pocket earlier. At leasst see if he is willing to go for a long settlement, the longer the better while you get your plans approved with the local council (at least make your contract "subject to an approved Development Application [DA] with ABC Council, no later than XYZ date with '3 x monthly extensions' with conditions (if any) which are acceptable to the buyer". Failing that, go for a quick transfer with a large discount (say $50K = $750K) payable [without terms/conditions] within 14 days. Even if you are refused building permission for 3 units and can only build 2, at $750 plus costs [~$50K) plus 2 x $250K = a total of 2 x $650K = $1.3mil. With a selling price of $700K to $750K, it still gives you $100K to $200K profit. A lot of work for this return.

You will be incuring 'holding costs' in the form of 'lost opportunities'. ie: at least interest earned on the cash you pay to the seller. ~$800K x 5% x 12 months = $40K.
You will only incure bank costs (interest) as you draw down the building loan as and when needed, say as each stage is completed; est at ~$100K per month.
This will be a big project (especially for your first one) so get some help.
As for the est building costs of $250K per unit, that sounds high to me…speak to a builder ASAP to get an 'estimate' ASAP.
Do you have a building plan on hand?

Yould you not be better positioned to use your cash to buy smaller houses, renovate them ASAP (say max of 6 weeks each) with a modest profit of 15% to 30% on a purchase price of $400K = $60K to $120K per deal. If you only do one every 3 months, thats still a nice chunk of change ($240K to $480K) per year AND you reduce your risk/exposure by a HUGH %. You do NOT want to end up with a hole in the ground, with the builder unable to complete the project with the clock ticking.
If you do manage to get the property at a discount or on good terms (with a partnership is the best) you can use the cash your retain to do the reno on the side, gaining additional cash.