It is a pre-procedure step before anything can be filed with the Court that the parties attempt family dispute resolution. If agreement can't be reached or, as you've indicated, the other party simply doesn't attend, then you'll receive a s 60I certificate to show that you've attempted to reach an outcome through alternative dispute resolution pathways. Except in very limited circumstances (usually related to allegations of violence), this certificate forms a mandatory part of the documents to be filed with the Court.
So, before you can file, you need to contact a dispute resolution service. There are several that offer a family dispute resolution service for free, chief among them being Relationships Australia.
If/when you receive the s 60I certificate, you can file an initiating application with the Federal Circuit Court of Australia. The Family Court of Australia only hears more complex family law matters, but if the Federal Circuit Court decides the matter is complicated, it will transfer the matter to the Family Court of its own accord. When you file, you can ask the case to be heard on circuit while there are judges presiding in a town that is closer to your home, if you wish. The list of circuit locations can be viewed here:
Daily Court Lists - Federal Circuit Court of Australia (click NSW at the top).
Together with your initiating application, you'll need to consider what kind of orders you'd like made and organise them into a minute of orders sought, and you'll need to file an affidavit of evidence supporting why the orders you're seeking are in the best interests of the children. Consider the elements of s 60CC of the Family Law Act - read it here:
FAMILY LAW ACT 1975 - SECT 60CCHow a court determines what is in a child's best interests I believe you'll also need to file a notice of risk, along with the s 60I certificate from mediation.
As grandparents, your case will have either two applicants - you and the father; - or two respondents - the father and the mother. Where is dad in this situation? Is he involved in the child's life?