The Hunter River was discovered and named by Mr.
Shortland in 1797.) The object of the voyage was to make a survey of the river and to gain some knowledge of its natural productions, for at this time much of the coast, both to the north and to the south, was chiefly known from Cook's chart, and the geography of the more distant parts, marked but not explored by him, was still as he had left it.

Governor King was also anxious that the Lady Nelson should discover a passage at Port Stephens (called by the natives Yacaaba), and wrote to Paterson requesting him to complete the exploration of this port before September, "for," he said, "it will then be necessary to despatch Her Ladyship (i.e.
the Lady Nelson) to the southward."*) * This particular voyage to Port Stephens does not appear to have been carried out, for in August the brig was "refitting." (See Historical Records of New South Wales.) The Francis, schooner, was equipped to accompany the Lady Nelson, and orders were given that the schooner should be loaded with coals immediately on her arrival at the Hunter River and sent back to Sydney without delay.
Dr.Harris and Ensign Barrallier of the New South Wales Corps (who were appointed to execute the survey) accompanied Colonel Paterson.

A number of workmen and labourers were also received on board together with a native of Rose Bay named Bungaree.
The Lady Nelson left the harbour on June 10th, and as she passed out between the Heads, met the ship Cornwallis inward bound from England.

On June 11th she made North Head of Broken Bay distant 10 or 12 miles.
On the next day the weather was variable, but as there was a Sydney pilot on board Grant thought that the ship would be safe in his hands.

The man, however, mistook his course at a place called Reid's Mistake, which lies to the northward of Broken Bay.