Force10x - 10:37 pm on Oct 22, 2013 (gmt 0)
Well I don't know what was going on.
However, once I added the slash after the caret symbol all the redirects worked. It also resolved the issue where an extra slash was being added after subdomain.domain.com.au/
Surprisingly the rules worked on my local XAMPP setup without the slash after the caret symbol.
My guess is that the forward proxy on our test server is set up in a way that it required this slash to match the pattern.