Kenan & Stanka [2026] FedCFamC1F 57 (4 February 2026)

Note: The form of the order is subject to the entry in the Court's records.

Note: This copy of the Court's Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Kenan & Stanka has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

1. The applicant in this matter is Mr Kenan ("the applicant"). The applicant is a judgment creditor of the second respondent, Mr Iser ("the second respondent"), arising from proceedings in Country N. The first respondent, Ms Stanka ("the first respondent"), is the former wife of the second respondent.

1. The relevant background as asserted by the first respondent her affidavit filed 24 December 2025. The respondents were married in 1986 in China. It is their case that they separated on a final basis in October 2023 and were divorced in China in 2024. The respondents have two adult daughters from their marriage.
2. In 2007, the respondents established a business, B Ltd ("the business"). The first respondent held about 30 percent of the shares in the business whilst the second respondent held the remainder.
3. In 2010, the respondents moved to Australia. The second respondent managed the business in China which was involved in growing the business and required frequent travel between China and Melbourne.
4. The respondents and their children obtained permanent residency in 2014. In 2015 they purchased a property at F Street, Suburb G, VIC ("the [Suburb G] property"). Around this time, they established the D Family Trust ("the family trust"). The trustee is C Pty Ltd. The first respondent is the sole director and shareholder of C Pty Ltd. The beneficiaries of the trust were C Pty Ltd, the second respondent and the children. In about 2017/2018, the family trust purchased a property in Suburb H which was rented out once construction was completed in 2022.
5. In November 2019 the respondents travelled to City J where, around this time, the respondents purchased a property in their hometown being K Street, Province M, China ("[J Street] property"). Due to COVID-19, and the cancer diagnosis of the first respondent's brother thereafter, the first respondent has remained in China. In about 2020, the first respondent gives evidence that she was informed by the second respondent that he was being sued in Country N in relation to a commercial dispute. The applicant in these proceedings is the plaintiff in that dispute.

1. On about 20 December 2019, the second respondent was personally served with relevant court documents in relation to the Country N proceedings. On about 25 July 2024, the High Court of the Country N Special Court made an order against the second respondent ("Country N judgment") in favour of the applicant. By Order 2 of the Country N judgment, the second respondent is to pay the applicant the sum of Country N currency $47,210,400 within 28 days of the date of the judgment. By Order 3 of the Country N judgment, the second respondent was to pay interest of 4 percent per annum from 6 September 2019 until the date of the payment. The applicant gives evidence that when converted to AUD, the sum referred to in Order 2 is about $9,172,980.72 and Order 3 is about $1,900,943.18. The second respondent has not complied with the Country N judgment.
2. On 20 August 2024, the second respondent filed a Notice of Appeal in relation to the Country N judgment. Notwithstanding, the Country N judgment has not been stayed. On 6 November 2024, a Mareva injunction order was made restraining the second respondent in respect of his assets.
3. During November 2024, the applicant filed proceedings in the Supreme Court of Victoria seeking registration of the Country N judgment and a freezing order. On that date, the Supreme Court of Victoria made the freezing which prohibited the respondents from disposing of, dealing, encumbering, or diminishing the value of the Suburb G property. During December 2024, the Supreme Court of Victoria made an order requiring the applicant to make an application pursuant to s 79A of the Family Law Act 1975 (Cth) ("the Act") for the purposes of setting aside the consent orders made between the respondents which was filed in this Court on 20 December 2024.
4. During October 2025, an application by the second respondent in the Country N proceedings to stay and set aside the Country N judgment was dismissed. The second respondent filed a Notice of Appeal against this decision ion November 2025.
5. Both appeals are currently ongoing and have yet to be determined.

1. The affidavit evidence of the wife asserts that following the respondents' separation in October 2023, the second respondent has remained living in China. On 7 August 2024, the first respondent engaged a lawyer to finalise their property settlement by way of an Application for Consent Orders. During this process, the first respondent says that the second respondent disclosed that he held assets such as a E Company stock account in the sum of $3,500,000 and Country N holdings. The respondents had agreed to the value of the properties. There were no formal valuations instead the second respondent proposed the values based on his understanding of the real estate market. The first respondent states that she was agreeable to this based on the dynamics of the marriage and her being content with what she would be receiving.
2. The proposed orders provided for the first respondent to retain the properties in Australia and China, cash in her bank accounts and shares purchased for her by the second respondent worth about $400,000. It was agreed that the judgment debt arising from the Country N proceedings would be the second respondent's personal liability. The effect of the proposed orders was a division of the assets 58 per cent in favour of the first respondent. The orders were made by the Court in October 2024.
3. Pursuant to the orders, the first respondent was to discharge the mortgage associated with a property at L Street, City J, China ("[L Street] property"). The first respondent says that she hoped to sell the J Street property and use the proceeds of sale to discharge the L Street property mortgage, however, has failed to do so as real estate prices in China have significantly decreased meaning the proceeds would be insufficient to discharge the mortgage.
4. The respondents did not include in the consent orders the sum of $190,000 held by the family trust. The first respondent states that this was due to the daughter managing rental affairs and it not occurring to either of the respondents that there would be money standing to the credit of the family trust.
5. As to the business, in May and August 2024, the respondents transferred their shares in the business to their children. The first respondent denies that this was done to defeat any claim by the applicant but, rather, it was a longstanding intention for the children to take over the business. The first respondent says at paragraph 51 of her affidavit that the business was not included in the assets for the purposes of the consent orders as they considered it an asset of their children.
6. In 2024, the second respondent transferred his interest in the Suburb G property to the first respondent pursuant to the consent orders.

Section 79A Proceedings

1. These proceedings were initiated by the applicant on 20 December 2024 whereby he sought that pursuant to s 79A of the Act, the consent orders of 1 October 2024 be set aside. On 13 March 2025, the first respondent filed her Response whereby she sought that the application be dismissed and orders in the interim that the proceedings be stayed pending the outcome of the appeals filed in the Country N proceedings.
2. On 7 October 2025, orders were made by Alstergren CJ that the proceedings be transferred to the Federal Circuit and Family Court of Australia (Division 1) and the matter be listed for a threshold hearing for a single day on a date to be fixed. On 26 November 2025, orders were made listing the threshold hearing before myself on 28 January 2026. It is not apparent from the orders, or from submissions made, about what occurred before Alstergren CJ and what the "threshold issue" was. The applications before the Court were fixed for final hearing on 23 April 2026 for an estimated two days.

1. During the hearing on 28 January 2026, the applicant sought leave to file an Amended Initiating Application, by which the following relief was sought:
   1. Pursuant to section 79A of the Family Law Act 1975 (Cth) set aside the order made on 1 October 2024 in proceeding number (P)MLC10661/20[2]4.
   2. That within 30 days of this order, the Second Respondent shall forthwith do all acts and things and sign all documents to restore the First Respondent as a Joint Proprietor of the [F Street], [Suburb G], Victoria in the State of Victoria, being the land more particularly described in certificate of title volume [...] folio [...].
   3. The respondents pay the applicant's costs.
   4. Such further or other order as the Court considers appropriate and just.
2. As the submissions were developed, it was apparent that, in effect, the applicant was making an oral application for summary judgment on the basis that the first respondent's Response to Initiating Application had no reasonable prospects of success.
3. The evidence said to support the application was contained in the respondent's Application for Consent Orders which was found as an annexure to the affidavit of the first respondent.
4. In the Application for Consent Orders, the response to the question 20 being "Is there any person who may be entitled to become a party to the case under subsection 79(10) or subsection 90SM(10) of the Act", was answered "no" by the respondents. The question refers to ss 79(10) and 90SM(10) of the Act, which is an analogue of ss 79AA(10) and 90SMA(10) of the Act as amended. As to liabilities, in response to question 57 as to whether there are "any other liabilities", the respondents stated "Judgment Debt in Country N Proceedings" with the amount owing answered as "$12,000,000".
5. That application was opposed by the first respondent. The second respondent has not participated in the proceedings and has not filed any material.

1. As canvassed by Aldridge J in Bukari & Bukari [2022] FedCFamC1A 50, the Federal Circuit and Family Court of Australia (Division 1) may give judgment for one party in a proceeding if it is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceedings (s 46(2) Federal Circuit and Family Court of Australia Act 2021 (Cth) ("FCFCOA Act")). In doing so, the Court need not be satisfied that the proceeding is hopeless or bound to fail (s 46(3) of Federal Circuit and Family Court of Australia Act).
2. The test to be applied under s 46 of the Federal Circuit and Family Court of Australia Act is less onerous than that described in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125.
3. The Full Court summarised the recent authorities in Ebner & Pappas [2014] FamCAFC 229; (2014) FLC 93-619 as follows:
   1. In Spencer v Commonwealth of Australia (2010) HCA 28; (2010) 241 CLR 118, referring to a Federal Court Rule in similar terms to Rule 10.12, Hayne, Crennan, Kiefel and Bell JJ said at [56]:

Because s 31A(3) provides that certainty of failure ("hopeless" or "bound to fail") need not be demonstrated in order to show that a plaintiff has no reasonable prospect of prosecuting an action, it is evident that s 31A is to be understood as requiring a different enquiry from that which had to be made under earlier procedural regimes. It follows, of course, that it is dangerous to seek to elucidate the meaning of the statutory expression "no reasonable prospect of successfully prosecuting the proceeding" by reference to what is said in those earlier cases.

1. The applicable test was considered by another intermediate court of appeal, the Victorian Court of Appeal in Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158. At that time the relevant legislative test in Victoria was "no real prospect of success". There at [27] Warren CJ and Nettle JA said:

... whatever might be the practical effect of the new test, it is difficult to disagree with McMurdo J in Gray v Morris and McMurdo P in the Commissioner of Taxation v Salcedo that it should be applied by reference to its own language, without paraphrase or comparison with the previous rule, always bearing in mind the principle that the power to award summary judgment is only to be exercised with caution and, therefore, not unless it is clear that there is no real question to be tried.

(Footnotes omitted)

Upon the present state of authority:

(a) the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a 'real' as opposed to a 'fanciful' chance of success;

(b) the test is to be applied by reference to its own language and without paraphrase or comparison with the 'hopeless' or 'bound to fail test' essayed in General Steel;

(c) it should be understood, however, that the test is to some degree a more liberal test than the 'hopeless' or 'bound to fail' test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent's case is not hopeless or bound to fail, it does not have a real prospect of success;

(d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.

1. The applicant relies on the failure on the part of the respondents to disclose in their response to question 20 that the applicant may not be able to recover his debt if the consent orders were made.
2. By her senior counsel, the first respondent conceded that the applicant was entitled to be given notice of the Application for Consent Orders but submitted that it would not have made any difference as the second respondent has sufficient assets after the orders were made to pay the creditor in full.
3. The applicant relied on Cantrell & North and Anor [2020] FamCAFC 175; (2020) FLC 93-976 (per Ryan, Aldridge & Austin JJ) ('Cantrell'). In that case, the application for orders pursuant to s 79 of the Act had failed to disclose to the Court a liability owed by the second respondent to a creditor. Orders were made at first instance setting aside the Court orders pursuant to s 79A of the Act.
4. The appeal was dismissed with the Court holding at [57]-[58] that it was not necessary for the Court to consider what orders would have been made pursuant to s 79 of the Act assuming that there had been proper disclosure. This was because the creditor had been deprived of their right to intervene in the proceedings and assert whatever rights they might have or take steps in other jurisdictions to enforce payments.
5. The Full Court stated at [59] of Cantrell that:
   1. Whilst it is ultimately a matter for determination on the facts in each particular matter, where consent orders have been obtained from the Court on the basis of false information for the purpose of defeating creditors, in most circumstances, this will be sufficient to justify an order varying or setting aside the order under s 79A of the Act.
6. Further, the Full Court at [63]-[68] of Cantrell refer to Semmens v Commonwealth (1990) FLC 92-116 where at [68] they state:

68. This led the Full Court in Semmens to observe at 77,767:

Whilst we think it inappropriate, in the absence of Rules of Court to this effect, to require notices to be given to third parties in all such circumstances, it must be recognised that the failure to do so in particular cases can severely impinge upon the "legitimate interests of third parties" and may almost inevitably in many cases constitute a "miscarriage of justice" within sec. 79A. Consequently, in our view, where in a proceeding under sec. 79, 86 or 87 it appears to either of the parties that there are interests of third parties which might be adversely affected by the orders which are being sought or the terms of the agreement, justice and common sense dictate that those third parties be given notice.

1. At [79]-[80] of Cantrell, the Full Court rejected the wife's submission that orders should only be made pursuant to s 79A(1)(a) of the Act if it is satisfied that the orders that should have been made were substantially different to those that were made.
2. At [81] of Cantrell, the Full Court said:
   1. It must be recalled that an applicant for property settlement consent orders must establish that the order is proper and satisfies s 79(2) of the Act. The obligation on parties to give accurate and full disclosure is of single importance in maintaining the integrity of the judicial process. Where the integrity of the judicial process is trammelled by giving false evidence which affects the rights of third parties, the Court must intervene.
3. Further, at [83], the Full Court held that the denial of procedural fairness will be sufficient to be able to justify the setting aside of orders.
4. Significantly, the Full Court also observed that not every failure to disclose and notify a creditor must lead to the setting aside of an order. At [89], the Full Court stated:
   1. These cases fall short of establishing the proposition put to us by the wife. Rather, they point to consideration on a case by case basis of whether the non-disclosure was of such magnitude so as to justify the varying or setting aside of an order. Such a proposition is unremarkable.
5. The first respondent by her affidavit contends that there are sufficient funds available to the husband to satisfy the judgment debt owed to the creditor. The evidence before the Court at present is in the form of assertions by the first respondent. However, the first respondent was not given notice that there would be an application for summary judgment. I accept that consideration of the matters canvassed by the Full Court at [89] of Cantrell in this case involves a contested factual dispute as to the assets held by the second respondent which must be determined at trial.
6. I reject the submission that the onus lies on the applicant to somehow establish that there has been a miscarriage of justice by proving that the second respondent does not have funds available to meet the judgment debt. There has been an accepted failure to notify a creditor and where the first respondent asserts that the second respondent has sufficient funds after the consent orders were made to meet the debt, it is a matter for her to prove that assertion by admissible evidence. He or she who asserts must prove.
7. The question of whether there are sufficient assets available to the second respondent is a triable issue and therefore the application for summary judgment ought to be dismissed.
8. I will not adjourn the applications until after any appeal proceedings are determined in Country N. The debt remains due and payable and the appeal does not stay the Country N judgment. The matter has already been listed for two days commencing on 23 April 2026 where the Court will hear the Amended Initiating Application and Response to Initiating Application. Trial directions were made by the orders of Alstergren CJ and they remain in force.

I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice McNab.