The daily rain could be the problem. The plants don't do well constantly wet, or nearly so, soil. In such instances, likely to end up with bacterial rot. If that's what's wrong, portions of the affected stem will will be soft or even mushy. Likely also smell bad. If that's the case, yes, best to start over.

I tip prune all my natives, except the Grevillea's them I take to with a saw sometimes, expecially when they get too leggy so they are all growing into lovely bushy shrubs and trees now. I also have a Hymenosporum flavum ( Native Frangipani ) its only small I got it in May and I also asked for help on this forum, so have a look at the link below it will help. Cheers..MM. PS. Its a good idea to do a Search as sometimes those questions have been answered before. Type in the name on the first page of the left where the green border is. Here is a link that might be useful: Native Franipani

One point against Native Frangipani is they are brittle and easily wind damaged. Only last weekend I had to remove 2 trees because the wind completly removed the branches from one side of the tree and the second tree split down the middle. This is fairly common with rainforest trees as they are generally shallow rooted and do require the rest of the forest for protection. I have also found too much mulch stops the tree from sending its roots down, The roots stay just under the surface where all the nutrients are. Plant them in a protected position and they should be OK. If planted in the shade the tree will be tall and straggley because it is trying to get to the sun as most rainforest trees have their canopies in the sun. If you plant rainforest trees in full sun they tend to be bushier and only grow to about 1/3 to 1/2 the stated forest height. A good example of this is the Flindersia brayleyana or Qld Maple. In the forest it may reach 40 metres but in full sun only 8 to 10 metres.

My experience with Hymenosporum flavum is from a California perspective, and they grow well here, but do seem to prefer sandy loam soils over heavy clay soils for best year round appearance. Did the leaf drop start to occur after either a prolonged dry period or a cold snap? These two things can cause them to drop foliage here, as well as the roots staying too wet. In fact, this tree can often struggle when planted in pure clay, although as they get larger they seem more tolerant. They also tend to drop leaves with the onset of colder weather, and push rapid new growth when it warms up again. If you know you don't have a drainage problem, I'd suggest you wait to see if it pushes new growth once the height of winter is past, although if you are located in Sydney right on the water, your winter couldn't be all that cold to cause leaf drop. Maybe try an organic or slow release fertilizer to see if that helps... There is also a noticeable difference in vigor of plants within a block of seed grown trees at nurseries here, and I always look for the healthiest specimens over the larger ones when selecting this tree for gardens. It often seems that straggly plants never amount to much here, even after they have settled in. I love using this tree, as it can bloom multiple times from spring into fall, never gets too densely shading, fills the bill when something tall and narrow and evergreen is wanted, and the fragrance is heavenly. Surprising to find that a subtropical rainforest species from Queensland does so well in a summer dry Mediterranean climate, and is even quite frost hardy, easily tolerating down to 22F freezes here, with no permanent damage except complete defoliation.