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The first attempt to bring the Lady Denman Ferry back to where she was built on the banks of Currambene Creek Huskisson nearly ended in disaster. After being towed by tugs out through Sydney Heads into the open sea, The minehunter HMAS Snipe took over the tow and headed for Huskisson. They ran headlong into a southerly buster and HMAS Snipe, fearing the Lady Denman might sink turned back to Sydney and docked the Lady Denman at Garden Island.
The Navy later said the ferry was too unseaworthy to be towed to Huskisson, and unless the ship was repaired the Navy would not consider a second attempt.
During the aborted tow the Lady Denman suffered damage to her side and bow bulwark.
This put the volunteers from Huskisson into a financial bind as they did not have the funds to carry out the repairs and the Lady Denmans future looked very uncertain.
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