In the 1925 election, McDonald was narrowly defeated by Nationalist candidate Thomas Ley. McDonald took the result to court, claiming that Ley had tried to bribe him, asking him not to put in his nomination papers. However, on 15 April 1926 McDonald disappeared on his way to a meeting with New South Wales Premier Jack Lang. They were planning to have the election result declared void. Neither McDonald's body nor his brief case were ever found. 