Spud Shed boss Tony Galati and his sisters are fighting over the fruits of the former Yangebup market garden where they were raised by migrant parents Carmela and Frank.
At stake are the profits from almost $13 million of residential block sales generated by Carmela sub-dividing the two-hectare market garden before her death in August 2019.
Also at stake is the mansion built by Carmela and Frank in 1993 on the highest part of Yangebup property and where the couple lived together until his death in 2010.
In the red corner, we have daughters Carolina Galati and Maria Siragusa with what may be special rights to land sale profits sitting in a bank account they control as executors of Carmela’s estate.
In the blue corner, we have challengers Tony and brother Vince Galati probing two versions of legal advice the sisters obtained from a senior barrister in 2023.
While keeping the first draft a closely guarded secret, Carolina and Maria filed only the final version of that legal advice when applying for a Supreme Court ruling on how the land sale profits and mansion should be shared.
Pointing to the Carolina and Maria being executors of Carmela’s estate, Tony and Vince claimed the sisters were seeking the court’s go ahead for a course of action that gave them significant personal benefit.
The row has been revealed in a judgment giving Tony and Vince access to documents related to the original legal advice and different accounts of what was on Carmela’s mind when she made her will in May 2015.
Registrar Mark Fatharly gave Tony and Vince access in the face of what he described as “strenuous opposition” from the executors.
Registar Fatharly said the Carolina and Maria had filed more documents and submissions fighting their brothers’ access request than they had filed in support of their original will construction application.
He said this was “despite the insisted neutrality of the executors’ role”.
“Significant financial benefits dependent upon the proper construction and non-disclosure gives rise to suspicion,” the registrar said.
In her will, Carmela bequeathed to her daughters what was then a two hectare block on the north side of Yangebup Road and all her “personal belongings in and around the property”.
She bequeathed the remainder of her estate to be divided equally among the daughters, Tony, Vince and their brother Sam — who also works in the Spud Shed empire fronted by Tony.
Sam was not involved in the document access application.
While not outlined in Registrar Fatharly’s judgement, public records indicates that Carmela’s other assets include at least a one-sixth share in Spud Shed holding company Galati Nominees and stakes in Wattleup land jointly-owned with Tony and Vince.
Land title records also indicate Carmela had sold 20 of the 39 lots on her Yangebup sub-division for a total $6.6m by the time she died.
Her daughters, as their mother’s executors, sold the other 19 vacant lots for $6.2m — but kept their parent’s hilltop mansion on 1074 square metres of hilltop land in the hotly-contested estate.
Tony and Vince complained about the sisters, as executors, not full disclosing the facts and assumptions underpinning draft advice obtained from a senior barrister in May 2023 and a final version obtained in July 2023.
Registrar Fatharly said lawyers for Carolina and Maria originally briefed the senior barrister and obtained draft advice on the basis that it was very likely in May 2015 that the Yangebup property would be sub-divided.
At the request of the executors’ lawyers, the barrister changed the final advice “to refer to there being no indication, so far as the executors were aware” that Carmela was contemplating sub-division when she made the will.
Carolina and Maria shared the final advice with their brothers, but kept the draft advice in their secret pile.
Registrar Fatharly there was a risk of forensic unfairness if the documents and instructions provided to the senior barrister and the draft advice were not fully disclosed.
“The completeness of information and reliability of information cannot be fully assessed,” he said. “The instructions may be significant. Fundamental to the advice are the instructions and changes of instructions.”
The first known document relating to the sub-division of the Yangebup property appears to be a letter of engagement that Carmela signed with project manager and financer Terranovis in May 2016. She signed a management deal with Terranovis two months later.
Those documents were included in the original instructions to the senior barrister.
But the brothers’ legal team pointed those documents not being included in their sisters’ Supreme Court will construction application or their subsequent filings.
Registar Fatharly said that while it was not his role to determine the relevance or admissibility of evidence, he said the Terranovis documents were more proximate to the will signing than subdivision documents from 2017 and 2018.
https://thewest.com.au/news/court-justice/spud-king-tony-galati-and-wing-man-vince-wrestle-with-sisters-over-late-mum-carmelas-land-carve-up-c-17129338
