An Australian couple has all the Doc. signed a 3yr Lease now wants to leave 2 months later; how do you handle?

Try to find out for sure If it is indeed a heath reason and if so, nothing is to be gained by trying to hold them to the contract as they will be out of the country. In the realm of fair play, sometimes we have to step back and do what we fell is the right thing especially if the Apt can be rented out very easily to someone else.

I concur with Curtis. You will waste much time and effort if they are going back to Australia. Even if you get a judgement in Small Claims court how will you collect?

You could also try to 'mitigate' the loss.. ask them for some sort of buyout. (say 2 months rent to relet the space) May be worth a shot? I also agree with answers 1 and 2. :)

IF YOU KNOW THIS IS REALLY TRUE GIVE THEM YOUR BLESSING AND WISH THEM WELL

I usually empathize with the tenant and tell them that I'm fine if they move out, but they'll be responsible for the rent until I've re-leased the unit. With residential, that's usually not too long and most of the time is less than forfeiting their entire security deposit. Treat them in a fair manner how you would appreciate being treated in the same situation and you'll be fine.

Keep the chanels open, with them. Help them find a solution.
I would look to find new tenant to take over the lease ASAP.
If there are any fees/charges, i.e., loss of deposit for an early bail out, consider a partial charge, they may come back to do business with you, or have a referral.
Show them that it is about solutions, not headaches.

Find new tenants for a new lease right away cut you loses I've personally owned over 70 units and you'll never get paid trying to sue MOVE ON !!!

good previous advice, get it rented like today!
dont waste one day, get the move in writing!