At the time there were strong allegations that convicts being carried on board murdered the other passengers and crew and headed for San Francisco, but all contemporary evidence supports the assertion that she sank off the far north-western tip of Tasmania.

Lady Denison was fulfilling such a contract when she sailed from Port Adelaide for Hobart on 17 April 1850 under Captain Edwin Hammond with a crew of 12, 16 paying passengers, 11 convicts, and three prison guards: mounted constable Hill and metropolitan policemen Ward and Freebody.

Several months later a large quantity of wreckage positively identified as coming from the vessel was found on the Tasmanian coast[2] south of Cape Grim.

During the Australian gold rush there were reports that John Byett alias James Coyle, one of the convicts by the ship had been seen in Victoria[4] and rumours that another had sent letters to Australia from California.

James Coyle, in particular, had himself been a convict escapee from Van Diemen's Land, had worked in the Circular Head area, and probably still had friends willing to help him.