Hi @GregM,
What you are describing is fairly common with lilly pillies, and in most cases, it is stress-related rather than a disease taking hold. I don't see anything to indicate that your trees are diseased, so I suspect stress from a combination of things is the likely cause.
At around two to three years old lilly pillies often hit a point where their root systems are expanding quickly, and they are trying to balance where their energy is being sent. Hot weather can throw this balance off, leading to sudden leaf drop and thinning, even if the plants previously looked very healthy. Heat stress is a very likely contributor, especially if the leaf drop came on quickly and the fallen leaves are dry and brown rather than black or mushy, which looks to be the case.
While regular watering is essential, watering every three days can actually be part of the problem, depending on soil type. If the soil is heavy or slow-draining, frequent watering combined with fresh mulch can keep the root zone too wet. This reduces oxygen to the roots and causes stress that can cause sudden leaf drop. Lilly pillies like deep watering, but they also need the soil to dry slightly between waterings. I'd suggest you reduce the frequency to one deep watering weekly, checking that the soil, beneath the mulch, is dry before watering again by pushing your finger into the soil to gauge the moisture. If it is wet, wait a day or two; if it is dry, go ahead and water.
I'd also suggest you give them a good trim to promote airflow, particularly around the base of the tree. While I don't think root rot is the cause, the leaf cover is rather dense at the base of your trees, which will restrict airflow, which, combined with fresh mulch and too much water, can certainly lead to issues.
You'll also want to ensure that the mulch is not pressed against the base of the trees, as this can hold water against the trunk for prolonged periods, which can cause rot. You'll want to have an area around 300mm in diameter around the trunk free of mulch so that it can breathe.
Finally, I'd suggest you apply a slow-release native fertiliser such as this Scotts Osmocote Native Controlled Release Fertiliser to ensure they have the right nutrients, they'll need to overcome the stress and resume healthy growth.
To summarise, I don't think there is a major issue, just a combination of a few things stressing them out. To combat the issue, reduce your watering schedule to once a week, increase airflow around the base of the trunk by trimming back branches, tidy up the mulch so moisture is not held against the trunk and apply a native fertiliser. With these simple steps, things should balance out relatively quickly and your lilly pillies should thrive.
Let me know if you have any further questions.
Jacob
