Nick is ranting about what happened at school. He says he's going to get Zadro for this. Nick says he can't prove anything though - revenge is the only option. Katie suggests putting itching power in Zadro's jumper(!)
Katie is delaying going to tell Joe about the rabbit. She wants Todd to go with her, but he won't. Katie goes off to confess.
Nick says he's sick of always being everyone's target. He's frustrated that he can't prove his innocence.
Joe answers the door to Katie. She says she's come about her rabbit. Joe says that she hopes she likes her new rabbit and says he's sorry he upset her. He says they had a first-class funeral because he knows how much the casserole dish cost(!). He says if she can think of any other way he can make it up to her, she must tell him. Katie can't get a word in edgeways and nods hopelessly.
Jim comes to see Paul. Paul tells him that he's the new owner of the Daniel's Corporation - Rosemary signed that afternoon. Jim congratulates him. He tells Paul to make it a real celebration and to talk things out with Gail. But Paul says that Gail is being unreasonable. Jim doesn't think that Gail is joking about separation but Paul is certain that she's bluffing.
Outside the pub
Gail is telling Rosemary and Helen that Paul's clinched his deal at the expense of their relationship. Rosemary says that the job in New York is there if she wants it. When Rosemary has gone, Helen asks Gail if it's really so easy to throw away her marriage. Gail says it isn't easy, but Paul doesn't care about her or he wouldn't be treating her like this. New York will at least give her some distance.
Nick tells Jim that he didn't graffiti the car, and Jim believes him. Jim says he's fed up of people using Nick as a punching bag and he'll help him to sort it out. Helen warns Jim to be diplomatic - in fact, she'll go and talk to Mr Muir herself. She goes off to call a taxi.
A parcel has arrived for Jim - it's an anniversary card and present from Beverly. Things are going well in Perth at the symposium and she's going to call off in Adelaide to see family on the way home.
Paul drives up and sees Helen coming out of the house. She congratulates him on the Lassiter's deal and invites him to dinner tonight. Helen says she can't believe that he's treating the situation so lightly. Paul says that Gail will come to her senses and come home! Helen says all he's talking about is pride - he should forget who's right or wrong and make up with her. Paul says he'll talk to her tonight when she comes to pick up some clothes.
Nick is worried that Helen won't be able to talk Mr Muir around. He says his only option is revenge!
Katie comes in looking fed up. She says Joe was really nice. She couldn't tell him about the rabbit. She suggests that she gives Joe's rabbit to a friend, but Jim insists that she tells Joe. She goes off reluctantly to do it.
Mr Muir's Office
Helen is telling Mr Muir that he has acted on emotion. She says that Nick didn't do it and the evidence is only circumstancial. Besides, the damage to the car isn't Nick's art style. She says that they have another suspect, but Nick won't dob. Mr Muir says that if Nick shows regret, he might reconsider. Helen says that Nick won't admit to being guilty when he's not. Mr Muir says that his decision to expel Nick stands.
Garden of the Mangels
Bouncer has dug up the casserole dish and is eating the rabbit stew! Joe berates him for robbing a grave!
Just then Joe hears Katie come up and he suggests that they go inside.
Katie admits that Rupert isn't dead and buried after all. Joe laughs in relief and delight. He shakes Katie's hand while Bouncer licks his lips.
Jim comes round to look for Katie. Joe is in a good mood. Katie asks if he wants Rosco the rabbit back, but he tells her to keep him. Katie is delighted.
Nick thanks Helen for trying with Mr Muir, but Helen says she's not finished yet - she'll think of something. Helen wishes they had proof that Zadro damaged Mr Muir's car.
Sharon says that someone will have to do something.
Paul and Gail's
Gail tells Paul that she wants him to be happy and congratulates him on the deal. Paul says that he did the deal for both of them. He says Gail's not fooling him - their marriage isn't in trouble. Gail is incredulous that Paul isn't taking her seriously. Paul says they love each other but Gail says she doesn't think she loves him any more. She walks out.
Jim says that they'd better think of enrolling Nick in another school, but Helen says she'll appeal to the Education Board.
Sharon picks up a scrapbook of clippings that Madeleine has left behind. Helen says that Madeleine is convinced that she'll find the evidence to clear her father's name. Sharon says she's going to do the same - she's going to clear Nick's name.