Any suggestions or experiences similar to this?

I have a client (eg  'coname' Holdings Pty Ltd) who wishes to register
domain in the format 'coname'.com.au
The domain is already registered to a company that holds a RBN in NSW and
has been since about 1998.

The registrant company (shown in whois data) appears (according to ASIC
Names Index) to be defunct.
DNS digs show that there are no records current in DNS for the domain and it
is not in use at all with only a single SOA record through aunic.net
indicating that it doesn't have a host.

Polite approaches to the registrant of the domain reveal that they are
sitting on it in a cybersquatting kind of way waiting for "generous offers".
I was asked how much my offer was and when I suggested that the domain was
not owned but licensed the reply was "so then how much is it worth to you?
How much are you offering?".

Clearly this person/defunct business (the person's name does not relate to
the domain at all) is *not* using the domain and has no intention of ever
using it for anything other than to "sell it" at the highest price to my
client or any one of the other companies who have a form of the 'coname' and
would presumably be eligible under the rules for .com.au.

Surely the actions of this cybersquatter are contrary to the intentions of
the regulations as they currently stand?  Yet the current regulations appear
to be inadequate to deal with such a situation.  I also suspect that this
will still not be addressed even in the new regulations?

What are the current mechanisms for dealing with this type of cybersquatter
and is this being addressed in a better way with the new regulations that
are to commence July 1?  After reading both the current and the new
regulations I still can't see where such a 'qualified cybersquatter' (sic)
can be dealt with.

Would it be better to commence a complaint to auDA/Melb IT over this issue
under the current or to auDA under the new regulations?

Thanks

Phil Wright