Lawlessness abounds as miners stream into Paterson's Ridge. Anita Hargreaves invites Luke to dinner. Colin McGregor proposes to his organist Emily Cornish. Rob and Luke, in defending Victoria Blackwood's honour, get into a punch up with some miners, and Matt finds the courage to ask Kathleen to go with him to the Mountain Ball. Meanwhile, Frank Blackwood plans to poison Kathleen's cattle to force her from her land.

Oliver Blackwood schemes to take over Matt's land. Frank Blackwood is jealous of his father's business dealings with Luke. Herbert arrives home with some local dignitaries to find Anita and Luke in a passionate embrace. The next day their liaison is all over town, and Anita arrives at the Mountain Ball on Luke's arm. Oliver Blackwood asks Anita to share his life at Balmoral, but before she can answer, a shot rings out and he falls to the floor.

Luke is again pursuing a more than willing Victoria as she helps him search for a new house. Oliver Blackwood inadvertantly nominates a reluctant Matt to run for state parliament forcing him to get Luke to run against him. Danni experiences first love when she falls for an accused cattle rustler. Colin and Emily marry but Matt seems to have eyes only for Kathleen.

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Edward Dengate is the new constable in Paterson's Ridge, which he hates because he would rather be a farmer. Matt convinces Edward's father that he cannot choose his son's life for him, and Edward leaves to fulfill his dream.

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