One of the smallest boats to sail across the Pacific Ocean, Happy II was the second attempt by her owner, Howard Wayne Smith, to solo circumnavigate the world. After departing from the USA east coast, through the Panama Canal and across the Pacific, the first boat was wrecked on a reef off Noumea, New Caledonia. Undeterred, Smith built Happy II and continued on his circumnavigation, eventually making landfall near Ballina, New South Wales. However, Smith had arrived without a visa. Also, Australian Customs imposed a $2 000 bond on the boat to cover import duties. He had no money to pay the bond, but was given a tourist visa for 3 to 6 months, which allowed him to stay in Australia. Smith breached conditions of his visa, for which he faced the courts and was deported. Still unable to raise the bond on Happy II, he would have to forfeit her.

Smith approached the Queensland Maritime Museum with a view to the Museum buying the boat so he could pay the bond to Customs. The Museum declined, so Smith offered to donate it to the Museum. However, Customs would only release the boat when they received payment for the bond. The Museum declined again. Customs allowed Smith to return to Canada and retained the boat.