In October 1998, Shane Howard, Marcia Howard and Bygrave reformed Goanna and recorded a third album "Spirit Returns", released in November. Joining the line-up was Kerryn Tolhurst (The Dingoes), with other guest musicians on the album including Steve Cooney, Liam O'Maonlai, Bill Jacobi (bass guitar) and Greg Sheehan (drums). The tracks ranged from the bluesy "What Else is a Life" (which was released as the first single), the country-inflected "This Old Town", to the politicised "Song for East Timor", as well as a cover of the Tolhurst-penned, The Dingoes track "Your Song". Marcia Howard's "Sorry", was influenced by the documentary "Lousy Little Sixpence", based on Margaret Tuckers' story, 'If Everyone Cared', that chronicled her story of the 'stolen generation' of indigenous people. Shane Howard recorded in Ireland with Stephen Cooney and Liam O'Maonlai (Hot House Flowers), while Tolhurst added the final touches in New York. Goanna performed the song at the first National Sorry Day at Parliament House in Canberra in 1998, the same morning the "Bringing Them Home" report was released. "Sorry" was released by Goanna both on CD and as a resource book and video as a 'Sorry Day' resource by Fraynework Media.