The long-running legal row between Philip Cardaci and his brother's widow, Mae, has continued, with a Supreme Court judge describing the latest application as "objectively hopeless".
The long-running legal row between Philip Cardaci and his brother's widow, Mae, has continued, with a Supreme Court judge describing the latest application as "objectively hopeless".
Companies controlled by Mr Cardaci have asked the court to set aside statutory demands made by Ms Cardaci, who asked for the $4.6 million used to fund legal proceedings to be repaid to the late Marc Cardaci's trusts.
Ms Cardaci has also asked for her legal costs to be payable by not only the companies but also by Mr Cardaci, who was not a party to the proceedings.
Supreme Court of Western Australia Justice Michael Lundberg delivered a decision yesterday, ordering Mr Cardaci and his companies pay all of Ms Cardaci’s costs so that she was completely indemnified.
In his judgment, Justice Lundberg said applications made by Mr Cardaci-controlled companies to set aside Ms Cardaci's statutory demands and opposing her indemnity costs orders were plainly unreasonable.
“The matters to which I have referred in these reasons demonstrate that these applications were objectively hopeless from the outset,” he said.
“Within the course of the proceedings, the plaintiffs also agitated contentions that Ms Cardaci was acting for a collateral purpose. I formed the view that those contentions were without any basis.”
Rectangular and Washburn were once trustees of the deceased CFC Group chief’s trusts, the Marc Cardaci Testamentary Trust and the Washburn Trust, reportedly valued at $40 million in total.
Previous Supreme Court judgments said Rectangular and Washburn were controlled by Philip Cardaci.
Ms Cardaci took Mr Cardaci to court over the estate and control of the two trusts, which started years of legal proceedings.
In December 2021, the court appointed Ms Cardaci as trustee over the trusts.
According to yesterday’s judgment, Ms Cardaci served two statutory demands on Rectangular and Washburn to pay back the $4.6 million that had been taken out from the trusts to fund the legal proceedings.
Statutory demands could be used by a creditor to apply for the winding up of a company that failed to pay a debt, but Justice Lundberg said non-compliance did not automatically lead to liquidation.
Ms Cardaci proposed alternative cost arrangements and requested for costs to be paid by not only Rectangular and Washburn but also by Mr Cardaci, according to yesterday’s judgment.
She also suggested a compromise to have the statutory demands set aside if Rectangular and Washburn paid the $4.6 million into court, but the offer was rejected.
The companies opposed the indemnity costs orders sought by Ms Cardaci and applied to have the statutory demands set aside.
Yesterday’s judgment revealed Rectangular and Washburn were assetless trustee companies bordering on insolvency.
Justice Lundberg said there was a strong basis to infer the companies had an ulterior motive in submitting their applications.
“The ulterior motive which can be inferred is that the plaintiffs were seeking to delay the overall process by which Ms Cardaci might secure a winding up order as against them, and thereafter obtain control of the companies,” he said.
“Yet, properly advised, the plaintiff companies ought to have known that they had no chance of success on the grounds they advanced.”
