The seaside resort of Cape Paterson faces Bass Strait, 8 km south-east of Wonthaggi, and is about 120 km south-east of Melbourne. The cape was named by Lieutenant James Grant while exploring the coast in 1801, honouring Lieutenant Colonel William Paterson of the New South Wales Corps.
Black coal was discovered in an outcrop near Cape Paterson by the explorer William Hovell in 1826. Although rediscovered and investigated over the next 40 years, mining was never economically viable. Two companies sank shafts in the area in the 1850s. A tramway was laid along the coast to carry coal to the cape where it could be transhipped to waiting vessels. But these difficulties of transport and the thinness of the seams doomed the venture. Eventually, much better coal seams were found north of Cape Paterson in the valley of the Powlett River. The State Coal Mines and the town of Wonthaggi were established there from 1909.
By the early 1920s some Wonthaggi residents had built huts at several locations along the nearby coast. These huts were constructed of scrap timber, driftwood and flattened kerosene tins and were used by fishermen and mining families for weekends and holidays. During periods of unemployment or strikes, they became permanent homes where people were able survive cheaply on fish and rabbits. There were eventually about 14 huts at Cape Paterson. To reach Cape Paterson, a track along the coastal cliffs followed the route of the old tramline, traces of which are still visible. Later, a track was cut through heavy scrub on the approximate path of the present road.
In the 1930s the road to Cape Paterson was improved, allowing as many as 1000 visitors to use the safe sheltered swimming beach or the surf beach on fine Sundays. Cape Paterson was now to be a seaside resort, so the government wanted to evict the hut dwellers. The matter was disputed and it was not until the mid-1950s that the huts were removed.
Meanwhile, facilities such as kiosk, public conveniences and changing sheds were constructed. A shallow wading pool was carved out of rock at the swimming beach and a life saving club was established in 1938. Camping sites and residential subdivisions were allocated. For many years, Cape Paterson was a popular destination for large public picnics. From the 1980s, the town has grown steadily. By 1984 there was a resident population of 300, reaching 450 by 1988. The number of houses and flats, mainly for holiday use, increased from 400 in 1984 to 700 in 1992.
Cape Paterson has a hotel, a community centre, a few shops, foreshore caravan parks and the Wonthaggi and Cape Paterson surf life saving clubs. Sewerage is connected to developed and undeveloped building lots.
The coastline for 17 km east and west of Cape Paterson has been declared a marine and coastal park. The Bunurong Cliffs are comprised of steep sea cliffs, rocky headlands and small sandy beaches. The intertidal rock platforms provide a rich reef habitat. Remnant examples of coastal vegetation survive within the park. The area is popular for fishing, snorkelling, hang gliding and beachcombing as well surfing and swimming.
A controversial residential subdivision called the Cape Paterson Eco-village was approved by the state government in 2011 against the wishes of the Bass Coast Shire Council, comprising 190 homes, tourist accommodation, a community hub and 25 hectares of public space.
Census populations for Cape Paterson have been:
The median age of residents was 49 years (2011 census). On census night 67% of the dwellings at Cape Paterson were unoccupied.
W.R. Hayes, The golden coast: history of the Bunurong, 1998
J. Chambers, Out to the wreck, 1988
B. Hayes, 'Miners’ huts on the Bunurong coast', Gippsland Heritage Journal No 17, 1994
J.L. Knight, ‘The story of black coal in Victoria’, Mining and Geological Journal Volume 4 (4), 1951
The land of the lyre bird: a story of early settlement in the great forest of South Gippsland, 1920
Bunurong Marine and Coastal Park: proposed management plan, Department of Conservation and Environment, Victoria, 1992