Silvester Thornton who arrived as a convict in 1826 was the first licencee of the Family Hotel.
He was only fourteen years of age when he was convicted of arson at a rope works at Lancaster in September 1824. He was sentenced to transportation for life. 
After conviction he was incarcerated in Lancaster Castle . From there he was sent to the Justitia hulk where he was punished on one occasion for a theft committed by himself and others on a newcomer to the hulk. From the Justitia Hulk he was transferred to the convict ship Marquis of Huntley on 9 May 1825 for transportation to New South Wales. 
After arrival in the colony he was sent to the Carter's Barracks. He absconded from there at least twice. His description was posted in March 1828: Ropemaker age 17. From Huddersfield. 4ft 8 in, grey eyes, dark brown hair, fresh freckled complexion. Absconded from Carter's Barracks for the second time. 
By 1835 he had turned his life around. He married Sarah Lewis at Glendon in September 1835.  Sarah, the daughter of convict George Lewis (ship York 1831). Sarah Lewis arrived free with her mother and siblings in 1834. She was aged 22 and Silvester 37 at the time of their marriage
In 1836 Silvester was assigned to Col. Henry Dumaresq. He was granted a Ticket of Leave in this year for the district of Invermein and a pardon in 1841.
By 1843 Silvester and Sarah ran the Family Hotel at Muswellbrook. He held the licence for this hotel for the years 1843 and 1844.  He ran into financial difficulties by the end of 1844. 
When he died in April 1845 the Hotel was advertised to be let for a term of 3 or 5 years . This advertisement provides a description of the premises as they were at that time -
On the ground floor - One large parlour 15' 4 by 14' 6 Large bar, 14 '2 by 15 ' 4 Inner Parlour, 15 ' 4 by 15' Bedroom , 10' 6 by 10 ' Sitting Room 10' 6 by 10 ' Laundry 17 ' by 10 ' There was a large kitchen,offices and servants' bedrooms; one six stall stable and coaching house; a garden in full cultivation and yard attached. The Upper flat contained four bedrooms the whole length and breadth of the house. There was also a small cottage adjoining which was to be included along with the hotel. 
Robert Scott Ross
Robert Scott Ross was granted the publican's licence in June 1845. 
Alexander Johnston held the licence from June 1846 until 1850 when he moved to the Woolpack Inn. His son Gilbert Johnston continued to run the Family Hotel until September 1851 when he advertised the premises for sale.
Hugh McCauley applied for a publican's licence but was refused by the Bench as there were too many hotels in Muswellbrook.
At the quarterly meeting of magistrates at Muswellbrook to take into consideration of publicans' general licences, there were two applications for general licences - Mr. Hugh Mc'Auley for the Family Hotel, and Mr. Edward Richardson for the Muswellbrook Inn; both applications being opposed by Mr. Fox, Chief Constable, on the following grounds that there were already too many public houses in Muswellbrook, that the applicants resided only two roods distant from each other, and that there was now a licenced house within a few yards of the applicants' residences, and five others in the township. So many licenced houses were not necessary, on the contrary, when situated so close together as these houses were, if licenced, they would become nuisances to respectable travellers, and to the sober inhabitants of the town ; also that two of the constables belonging to the Muswellbrook force have
for the last l8 months been stationed at Merton, twelve miles off, where there was only one public house, and there being so much escort and other duties on this line of road taking the constables here so often from home, it would be impossible for the police stationed at Muswellbrook to keep order and do all other duties if more licences were granted. The majority of the Bench refused McAuley's licence, and granted Richardson's. 
2). A son Thomas Lewis Thornton was born in September 1838 however died soon afterwards. Eliza Armstrong Thornton was born in 1839, Robert Armstrong Thornton in 1841, Sydney Joseph Thornton in 1842 and Sylvester Lewis Thornton in 1844.
 The Morning Chronicle 6 September 1824
 Liverpool Mercury 27 February 1824
 Convict Prison Hulks: Registers and Letter Books; Ancestry.com. UK, Prison Hulk Registers and Letter Books, 1802-1849.
 Sydney Gazette 3 March 1838
 FamilySearch.org Historical Records
 Return of Convicts New South Wales 1837
 Sydney Gazette 9 September 1841
 State Archives NSW Ancestry.com. New South Wales, Australia, Certificates for Publicans' licences, 1830-1849, 1853-1860
 Maitland Mercury 7 December 1844
 Maitland Mercury 4 October 1845
 Maitland Mercury 4 October 1845
 State Archives NSW; Series: 14401; Item: [4/76-77]; Reel: 5059 Ancestry.com. New South Wales, Australia, Certificates for Publicans' licences, 1830-1849, 1853-1860