my father and his parents are polish born there.
Simply being born in Poland does not make a person Polish. Do you have documentation proving that your father was a Polish citizen (e.g. a Polish passport or ID card)? You're going to need that.
My father was not in the australian armed forces.
Do you have a document from the Australian MoD confirming that? You'll need it.
If he took up Australian citizenship, he may well have lost his Polish citizenship. Either way, you're going to need to prove that he didn't take up Australian citizenship at a time which would have lost him his Polish citizenship. I'd imagine that the Australian Home Office would be able to tell you if and when he took Australian citizenship.
look up his death and immigration certificates which should show these details of citizenship ?
I would imagine that his immigration documents will simply show what he declared his nationality to be. And his death certificate will, if it mentions nationality at all, state what the Australians considered him to be, which could be rather different to Poland's views on the matter.
I am thinking I need to contact the polish embassy here in australia is this what i should be doing am I on the right path?
Not a bad idea at all.