Sometimes Lady Elizabeth would make other runs to Chinese ports in the Asian Indian region to deliver timber.

Lady Elizabeth was only in service for nine years when she met her fate on 30 June 1878, while she was on charter for Messrs Shenton and Monger to carry a cargo of lead ore and 611 tons of sandalwood to Shanghai.

Captain Scott encountered rough weather around Rottnest Island and the ship was driven south because of the difficulties in acquiring navigational headings.

On the morning of 30 June, Captain Scott ordered the crew to head back to Fremantle about 55 kilometres away to south-south-east.

[6] During the heavy storm, one man was lost overboard but the crew could not launch any boats to rescue the sailor because of the weather.

The ship lost control and swung to the south when Captain Scott ordered the port anchor be dropped.

Captain Nash, a pilot on Rottnest Island saw the blue distress signal flares but was unable to reach Lady Elizabeth due to the weather.

The court inquiry was held by L. Worsley Clifton, Collector of Customs; John F. Stone, J.P.; and W. E. Archdeacon, Staff Commander, R.N., Admiralty Surveyor.

Shortly after the sinking of Lady Elizabeth, Ah Cum, a Chinese steward, was charged with larceny.