Captain Wolcott is embarrassed by the antics of his seven mischievous children when they interrupt a dinner given for the Captain's new Commanding Officer.

While on an errand to make up for the disastrous dinner party, Pip and Judy take a detour to a carnival.

The Captain holds Judy responsible for the misbehavior of the entire group of children and she is sent off to boarding school at Mount Victoria.

Judy is determined to run away and return home, so she embarks on a long hike through the wilderness back to Sydney.

Judy arrives home, worn out and ill, but makes the other children promise not to let Esther or the Captain know, for fear of being sent back to school.

The Captain eventually finds Judy in the barn and is about to punish her but then discovers that she's desperately ill.