Forgery, Family & Fallout: Judge Unwinds Deception in $2.85M Property Battle

📝 Introduction

In Morcos & Lindon (No 3) [2025] FedCFamC1F 183, the Federal Circuit and Family Court of Australia (Division 1) delivered a compelling decision steeped in complex family property dynamics, intergenerational trust structures, forged documents, and pending appeals. This judgment follows earlier litigation and builds on prior factual findings, navigating contested property interests, executorial substitutions, and applications to amend and stay previous orders. The legal and equitable implications of financial misconduct, testamentary trusts, and delayed administration of estates were central to the outcome.

📚 Facts and Issues

Key Facts:

• Mr Morcos and Ms Lindon were parties to property proceedings after separation in 2013.
• A key asset, the D Street property ($2.85M), was purchased under the name of the husband's late mother (Ms B) using his own funds.
• Ms B died in 2010; probate was only obtained in 2019—during which time Mr Morcos was an undischarged bankrupt.
• The Court found that Mr Morcos forged documents in his mother’s name, including after her death, to secure an additional $750,000 loan.
• Mr Morcos was the Executor of Ms B’s Estate but later resigned; his daughters were appointed Trustees.
• Following final property orders in January 2025, applications were made:
• For joinder/substitution of the new Trustees.
• For a stay of orders pending appeal.
• To correct alleged errors under the "slip rule".

Issues:

1. Should the new Trustees be substituted or joined as parties?
2. Should a stay be granted pending appeal?
3. Were the parties entitled to relief under the slip rule?
4. Was there procedural or factual justification for amendments or stays?

⚖️ Application of Law

1. Joinder/Substitution of Trustees

The Court dismissed the Trustees’ application for substitution or joinder. Bennett J ruled that:

“Substituting parties after I have delivered my decision is beyond my remit” [28].

Instead, such relief was better sought through the appeal process. The Court confirmed the identity of the Executor at the time of trial sufficed for procedural legitimacy.

2. Stay Pending Appeal

The Court applied the well-established discretionary test from Jackson & Balen [2009] FamCAFC 131 at [28], balancing the risk that an appeal may be rendered nugatory without a stay, against prejudice to the wife.

Despite concerns from Ms Lindon, Justice Bennett found the appeal had merit:

“I am satisfied that the appeal has legs. It may not succeed but it is not without merit.” [41]

Thus, a stay of the January 2025 orders was granted.

3. Slip Rule (Rule 10.13)

The Court distinguished between true “slip rule” errors—clerical or unintended misstatements—and substantive changes that cannot be revisited post-judgment.

• ✅ Allowed:
• Amendment of a caveat reference [51].
• Clarification of the proceeds distribution formula [67].
• ❌ Refused:
• Capital Gains Tax (CGT) adjustment—no evidence was led at trial [66, 80].
• Reconsideration of legal fee add-backs sourced from superannuation [60].
• Appointment of a neutral sales agent [82].

🧑‍⚖️ Analysis of Judgment and Judicial Reasoning

Justice Bennett exhibited scrupulous adherence to procedural fairness and judicial restraint. Recognising her role as functus officio after the final orders, she delineated the narrow boundaries of the slip rule.

On the CGT claim, the judge noted:

“There was no evidence, submission or even mere suggestion as to any tax liabilities arising from sale...” [66]

She applied Harrell & Nesland [2020] FamCAFC 21 and Gould v Vaggelas [1985] 157 CLR 215 to affirm that a slip rule does not permit substantive review.

Similarly, in applying Jackson & Balen, she exercised discretion to preserve the estate’s value during the appeal window—recognising the risks to both parties.

Her Honour was equally careful in assessing party joinder under s 92 of the Family Law Act 1975 (Cth)—ultimately refusing the application for being procedurally miscast.

💡 Take-Home Lessons

• Evidence is king: Claims (e.g., CGT liabilities) not supported at trial cannot be corrected later under the guise of the slip rule.
• Proper process matters: Substitution or joinder post-final orders must occur through appeal channels—not at the trial level.
• The slip rule is narrow: Only minor, clerical corrections reflecting the court’s original intention are permissible.
• Judicial economy and clarity prevail: Formula-based orders can aid implementation and reduce further litigation.
• Transparency has limits: Despite the judge’s misgivings, she refused to allow distribution of reasons to third parties (like the mortgagee) until post-appeal to avoid prejudicing ongoing litigation.