Leaving the safety of Newcastle harbour at 11am on 12 July 1866, a heavy sea struck the 552 ton Cawarra several times with tremendous force. Water rushed on deck and down the hatches. Flooding the bow immediately, the fires feeding the engines were put out and the vessel rapidly became unmanageable. With 61 passengers and crew on board, the Captain ordered the lifeboats out. He placed the female passengers on board with crew but the seas capsized the boats drowning all.
One crewmember, Hedges, was to be the only survivor from the shipwreck. He clung to the rigging with others until swept into the sea where he turned to see that the Cawarra had disappeared altogether. Fortuitously he was rescued by the sole survivor of the tragic Dunbar disaster in 1857.
The 64.3 metre Cawarra was built in Scotland just two years earlier and had been on a voyage from Sydney to Brisbane and Rockhampton.