In light of an American mining company's plan to build a dam which would flood out Wandin Valley, hardened New York journalist Karen Breslin comes to town in search of a story about a conservation protest.
Lucy takes a fall in the hospital and goes into premature labour. Allison Newman looses her baby and tells her husband she doesn't want children but would like to return to the city to concentrate on her career instead.
Kate's accident prone young cousin Claire is getting work experience at the hospital. She becomes friends with Hugo who decides to tell Harry about a suspicious mole that Claire is having trouble with.
Hugo is out of hospital and rehabing at Rainbow Farm where he quickly comes up with an idea to sell fertiliser but his ambitious plans are side tracked by the inability of the chickens to keep up with demand.
Hospitalised until he can pass his kidney stone, Bob's belief in the "Hatfield Curse" coupled with Cookie's tales of his "dear old uncle (God rest his soul)" convince Bob that he is near death.
Two weeks of living with Simon and Vicky has Frank and Shirley frazzled. Frank comes up with the idea of he and Shirley moving to his tenantless house, leaving theirs to Simon and Vicky.
Clancy (aka The Sloan Ranger) loses his first race after a promising start. Maggie and Bob are obviously disappointed but Cookie, who bet some of the club's money, takes it the hardest.
Shirley and Frank return from their honeymoon to face the daunting task of living together. Their first confrontation is over the placement of the urn which, unbeknownst to Shirley, contains the ashes of Frank's first wife.
Terence's concern over how the town will react to Katrina's illness proves correct as the local rumour mill and fear mongers learn of her condition. Vicky lies to Frank in an attempt to keep his pianola out of the house.
Jo Davis, a promising young gymnast, is injured but refuses to take time off. Harry struggles with the girl's mother who refuses to let him see her other daughter who is in a wheelchair for no apparent reason.
Tom intercedes between two neighbours who are feuding over their pets. Billy's preoccupation with guns and violence ever since Tom's shooting prompts Tom to give Billy a lecture on violence.
After trying to drive off Christina, Hugo chases down her bus on a "borrowed" bicycle to ask her to stay. Perce's prostate troubles have Esme concerned about his sudden antisocial behaviour.
Tiger Kelly drives a truck into Cookie and Bob's house. Kate Bryant, a new nurse at the hospital, moves in with Steve and Luke at the farm and takes possession of the horse Steve nearly hit.
While returning from a house call with Simon, Vicky stumbles upon the charred remains of an individual who apparently died in the bush fires, however, Terence's autopsy shows the woman died of a gunshot to the head.
Meryl and Dennis Bellamy, a hard working couple who don't easily accept charity, are released from hospital only to discover that after having lost everything in the fire, their insurance won't cover them.
