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[2025] NSWSC 450
General information, not legal advice.
Supreme Court of NSW
2025-05-20
Peden J
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Yin v Maalouf [2025] NSWSC 450
Hearing dates: 19-20 May 2025
Date of orders: 20 May 2025
Decision date: 20 May 2025
Jurisdiction: Equity - Commercial List
Before: Peden J
Decision: At [38]
Catchwords: CONTRACTS — Formation — Agreement — Whether share purchase agreement had effect of transferring shareholding — Whether agreement a sham
FRAUD — Misrepresentation — Whether ASIC misled by Form 484 that contained false representations — Whether plaintiff suffered loss and damage
CONSUMER LAW — Australian Consumer Law (ACL) s 18 — Whether plaintiff misled into signing share purchase agreement — Whether ASIC misled by Form 484 that contained false representations —Whether plaintiff suffered loss and damage
CORPORATIONS — Oral application for rectification of records maintained by ASIC pursuant to s 1322(4)(b) Corporations Act 2001 (Cth) — Where ASIC neither joined as party nor notified before application was brought — Whether court ought to order rectification of the register maintained by ASIC
Legislation Cited: Australian Consumer Law (Cth) s 18
Civil Procedure Act 2005 (NSW) ss 56-60
Competition and Consumer Act 2010 (Cth) sch 2
Corporations Act 2001 (Cth) s 1322
Supreme Court Act 1970 (NSW) s 23
Uniform Civil Procedure Rules 2005 (NSW) rr 29.7, 36.16
Cases Cited: Allesch v Maunz (2000) 203 CLR 172
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Chidiac v Bhatt [2014] NSWSC 1253
Kay v Playup Australia Pty Ltd [2018] NSWSC 1579
Re Bean & Sprout Pty Ltd [2018] NSWSC 456
Take Off Opportunities Pty Ltd v Susan Quinn Pty Ltd [2025] NSWSC 231
Yang v Zhang [2022] FCA 697
Category: Principal judgment
Parties: Sodaline Yin (plaintiff)
Roy Maalouf (first defendant)
Wraich Pty Ltd (second defendant)
Representation: Counsel:
H Fielder (plaintiff)
Solicitors:
Fusion Legal (plaintiff)
File Number(s): 2023/309730
Publication restriction: Nil
From early 2023, Mrs Sodaline Yin was the sole shareholder and director of Wraich Pty Ltd.
Mrs Yin’s complaint was that in August 2023, she discovered that Mr Roy Maalouf had lodged a Form 484 with ASIC in July 2023 asserting he had replaced her as the sole director and shareholder of Wraich. Mrs Yin asserted that she never agreed to transfer her shareholding, to resign as director, or that Mr Maalouf was to lodge the form. She sought the rectification of the public registers to their previous (and correct) state.
Mr Maalouf’s filed commercial list response asserted that Mrs Yin agreed to transfer her shareholding by signing a Share Purchase Agreement, pursuant to which she was to be paid $1,200,000. He further asserted the money was not to be paid directly to Mrs Yin, but instead was to be deducted from a debt said to have been owed by Mrs Yin’s former spouse, Mr Yadwinder Wraich.
However, Mr Maalouf did not appear at the hearing, and therefore did not lead any evidence to make good his pleaded assertions and resist Mrs Yin’s. I accept Mrs Yin’s evidence, which is cogent and consistent with objective documents.
For the reasons that follow, I find that:
The only agreement between Mrs Yin and Mr Maalouf was for him to provide her with advisory services and negotiate with co-investors of Wraich;
Mrs Yin did not transfer her shareholding in Wraich to Mr Maalouf by executing any Share Purchase Agreement;
Mr Maalouf lodged the Form 484 with ASIC to change Wraich’s public register without any legal basis or authority; and
The Form 484 filed by Mr Maalouf did not have the effect of changing the shareholding or directorship, and Mrs Yin remains the sole shareholder and director of Wraich.
The real issue in dispute is whether Mrs Yin transferred her shareholding to Mr Maalouf, such that he is the legal owner of the shareholding in Wraich and ought to be so recorded in the public register.
According to Mrs Yin, by February 2023, her relationship with her former spouse, Mr Wraich had broken down irretrievably. In their property settlement, she received the sole share in Wraich from Mr Wraich.
Wraich was involved in various property developments with other investors. When she took over the role of director, Mrs Yin was overwhelmed and found it difficult dealing with Wraich’s co-investors.
Through her accountant, Mr Ziad Ajjawi from Freedom Financial Management, Mrs Yin was given Mr Maalouf’s contact details. In April 2023, Mrs Yin paid Mr Maalouf $2,000 to assist her to negotiate with Wraich’s co-investors for Wraich to be bought out of the development projects. This was their only agreement.
Mr Maalouf represented to Mrs Yin that, in order to properly negotiate with the co-investors, she should sign a Share Purchase Agreement dated 28 April 2023. That document purported to transfer Mrs Yin’s share in Wraich to Mr Maalouf for $1,000. At the time, Mrs Yin believed the market value of the shareholding was over $2,500,000.
However, before signing, Mrs Yin had a conversation with Mr Maalouf:
Yin: What is the purpose of this document?
Maalouf: Just to show the investors that you have transferred the shares [sic] to me so they will believe me. This is the only way I can help you to get your investment back.
Yin: Do I get my money back from the investment.
Maalouf: Yes.
Yin: Why does it say $1,000.00 consideration?
Maalouf: The dollar value does not matter; we just want to show to the investors that there is an agreement in place. I am not really buying your share.
I accept that Mrs Yin then signed the Share Purchase Agreement in reliance on Mr Maalouf’s representations, but not with an intention to sell her shareholding. Mrs Yin did not resign from her position as a director of Wraich or sign a resolution to appoint Mr Maalouf as a director.
Therefore, the Share Purchase Agreement was only ever intended to be a sham, rather than a genuine agreement to sell Mrs Yin’s shareholding to Mr Maalouf. That is consistent with neither party behaving as if Mr Maalouf was the transferee of the share. For example:
Mr Maalouf never paid Mrs Yin in accordance with that agreement;
Mrs Yin paid Mr Maalouf for advice, which would have been unnecessary if she was no longer the owner of Wraich’s share; and
On 12 May 2023, Mrs Yin sent an email to co-investors authorising Mr Maalouf to negotiate on her behalf, which would have been unnecessary if she was no longer the owner of the share.
While I accept that this finding means that Mrs Yin had agreed that Mr Maalouf could deceive the co-investors into believing that he was a shareholder, I also accept her evidence that she trusted Mr Maalouf and did not know how to advance her position, other than as he suggested.
On 24 July 2023, unbeknownst to Mrs Yin, Mr Maalouf executed a Form 484, in which he asserted that he was a “current officeholder” and “director” of Wraich. Freedom Financial Management lodged that form with ASIC on 25 July 2023, ostensibly without Mrs Yin having given written authorisation for its lodgement. The public register was amended to record that from 1 July 2023, Mr Maalouf was the sole shareholder and director of Wraich.
That conduct was not in accordance with the only agreement I have found, and the Form 484 did not reflect the true ownership of the shareholding or directorship.
For completeness, I note that on 10 August 2023, Mr Maalouf presented Mrs Yin with another version of a Share Purchase Agreement, and represented again that it was to be used to show investors that Mr Maalouf was a shareholder, who could negotiate with them. The consideration for Mrs Yin’s share was this time stated as $1,200,000. Once more, Mr Maalouf assured Mrs Yin that he was “not really buying your share I just need this to negotiate from a stronger position”. I accept that solely on the basis of that representation, Mrs Yin signed the second Share Purchase Agreement. Again, she had no intention to transfer her shareholding to Mr Maalouf. However, by that time, Mr Maalouf had already lodged the Form 484, and therefore that second Share Purchase Agreement is of little relevance. In any event, I do not accept the Agreement had the legal effect of transferring Mrs Yin’s shareholding to Mr Maalouf.
Mrs Yin’s pleaded case included various claims, including non est factum, breach of fiduciary duty and statutory unconscionability, which were appropriately abandoned in closing submissions.
The only formulation of Mrs Yin’s case that was pressed was framed variously as misleading or deceptive conduct pursuant to s 18 of the Australian Consumer Law (as contained in sch 2 Competition and Consumer Act 2010 (Cth)), and fraudulent misrepresentation. No claim for damages or compensation was pressed.
Mrs Yin’s counsel submitted that her claim was that:
Mrs Yin was misled by Mr Maalouf’s representations that the executed Share Purchase Agreement would only be used to negotiate with co-investors, which caused Mrs Yin loss and damage; and
ASIC relied upon Mr Maalouf’s false representations in the Form 484 by changing the public register, which caused Mrs Yin loss and damage.
For both forms of misrepresentation, the “loss and damage” was said to be Mrs Yin’s loss of her shareholding and directorship in Wraich.
Those claims for misrepresentation are misconceived for the following reasons.
First, Mrs Yin agreed to sign the Share Purchase Agreement for the particular purpose of Mr Maalouf’s negotiations, and I have found that that agreement did not have the effect of transferring her shareholding to Mr Maalouf. Therefore, it is not correct to say that Mr Maalouf has in fact “used the [agreement] for the purpose of gaining a financial advantage, namely a shareholding in Wraich”. It has not been demonstrated that Mrs Yin has suffered such loss or damage.
Secondly, the lodgement of a Form 484 is not a means recognised by the Corporations Act 2001 (Cth) for the transfer of shares, the removal of directors or the appointment of directors, as distinct from the notification of those events, when they otherwise validly occur: Chidiac v Bhatt [2014] NSWSC 1253 at [52]-[53] (Black J). Here, there has been no valid transfer of Mrs Yin’s share, nor any valid removal of her as a director. Therefore, she has not suffered the loss and damage pleaded.
In her amended summons, Mrs Yin sought an order pursuant to s 237 of sch 2, Competition and Consumer Act, or s 23 Supreme Court Act 1970 (NSW) or the Court’s inherent jurisdiction, that Mr Maalouf and Wraich “do all things reasonably necessary to transfer [Mr Maalouf’s] shareholding in Wraich Pty Ltd to [Mrs Yin], appoint [Mrs Yin] as a director of Wraich Pty Ltd and for [Mr Maalouf] to resign as a director of Wraich Pty Ltd”. The further amended commercial list statement filed in court by Mrs Yin on the first day of the hearing sought an order “that Mr Maalouf return the directorship to Mrs Yin and transfer his shareholding in Wraich back to Mrs Yin”.
For completeness, I explain why I am prepared to give judgment in the absence of Mr Maalouf at the hearing on 19 and 20 May 2025.
Rule 29.7 Uniform Civil Procedure Rules 2005 (NSW) (UCPR) sets out the procedure to be followed if a party is absent. It relevantly provides:
29.7 Procedure to be followed if party is absent
(1) This rule applies when a trial is called on.
(2) If any party is absent, the court—
(a) may proceed with the trial generally or so far as concerns any claim for relief in the proceedings, or
(b) may adjourn the trial.
There can be no suggestion that Mr Maalouf has been denied procedural fairness. On 7 May 2025, at a pre-trial directions hearing, Mr Maalouf informed the Court that he:
had terminated the retainer with his solicitor a month earlier;
was in discussions with other solicitors about representing him; and
understood that if he wanted the hearing dates to be vacated, then he would need to bring a motion together with supporting evidence.
Since then, Mr Maalouf has not communicated with the Court or Mrs Yin.
Where the Court chooses to proceed rather than adjourning, that does not foreclose an absent party from being heard once and for all. UCPR r 36.16(2)(b) allows the Court to set aside or vary a judgment or order after it has been entered if it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order.
I do not consider that there is any impediment to the Court proceeding against Mr Maalouf. He has not explained his absence, the proceedings have been on foot since 2023, and there is no justification for an adjournment, which would be contrary to the overriding purpose of civil litigation in ss 56-60 of the Civil Procedure Act 2005 (NSW). That there is a right to an opportunity to be heard does not equate to a right to frustrate the hearing of proceedings by not attending them: Take Off Opportunities Pty Ltd v Susan Quinn Pty Ltd [2025] NSWSC 231 at [14] (Griffiths AJ). The Court is not required to delay proceedings indefinitely because a party on notice of the proceedings fails to appear: Allesch v Maunz (2000) 203 CLR 172 at [40] (Kirby J). In my opinion, there is no basis or utility in adjourning the proceedings here. It cannot be assumed Mr Maalouf would have appeared at any adjourned hearing.
For the above reasons, the appropriate orders are:
Declare that the only binding agreement between the plaintiff and first defendant was an oral agreement entered into in April 2023, whereby the first defendant promised to provide the plaintiff “director advice” and negotiate with the second defendant’s co-investors in return for payment of $2,000.
Declare the plaintiff remains the only shareholder and director of the second defendant.
Order the first defendant to pay the plaintiff’s costs as agreed or assessed on the ordinary basis.
**********
Yin
Maalouf [2025] NSWSC 450
(2000) 203 CLR 172
(2009) 239 CLR 175
However, as I have found above, Mr Maalouf is neither the owner of the share in Wraich, nor has he been properly appointed as the director of Wraich. Therefore, an order in the form sought ought not be made. Mrs Yin is the only shareholder and director in Wraich; she may take whatever lawful steps she considers appropriate to protect her position.
Orally, on the first day of the hearing, Mrs Yin’s counsel also sought an order pursuant to s 1322(4)(b) Corporations Act directing ASIC to amend Wraich’s listing on its public register. That section empowers the Court, on the application on an interested person, to make a conditional or unconditional order “directing the rectification of any register kept by ASIC under [the Corporations Act]”. The Court must be satisfied that “no substantial injustice has been or is likely to be caused to any person”: s 1322(6)(c).
I asked Mrs Yin’s counsel about whether ASIC ought to be joined to any such application, or at least notified. Later that day after court, Mrs Yin notified ASIC of her application. ASIC’s automated response indicated a reply would be provided within 5 business days.
On the second hearing day, relying on the notification to ASIC made the day before, Mrs Yin’s counsel pressed for an order under s 1322(4)(b). She tendered a print-out from the ASIC website that indicated that before persons sought an order under s 1322(4)(b), they ought to notify ASIC with the proposed form of order, so that ASIC could consider its position. I note that there is also authority that indicates that before the Court makes an order under s 1322(4)(b), ASIC ought to be joined, or at least notified: see eg Re Bean & Sprout Pty Ltd [2018] NSWSC 456 at [4]-[6] (Black J); Kay v Playup Australia Pty Ltd [2018] NSWSC 1579 at [13] (Parker J); see also Yang v Zhang [2022] FCA 697 at [82]-[86] (Downes J), where ASIC was not a party but was notified of the proceedings and provided a suggested form of order.
In an attempt to remedy the failure to notify ASIC before making the application, Mrs Yin’s counsel sought either an adjournment of the hearing for a week or longer to obtain ASIC’s response, or that a s 1322(4)(b) order be made, but for there to be “a stay of execution for 28 days [and for ASIC to have] liberty to apply to object or vary the orders if they so need”. I do not consider either course appropriate for the following reasons:
There was no evidence as to why the amendment to the relief sought was sought so late in proceedings that were commenced in 2023, and only in closing submissions. Mrs Yin knew that Mr Maalouf was no longer represented before the hearing commenced and he was not on notice of the proposed alternative order. Mr Maalouf ought to have been notified of the proposed amended relief.
Bringing the application before notifying ASIC was contrary to the expectation expressed in other cases and on ASIC’s website. Further, adopting the course of an adjournment or a stay of execution of order, as proposed by Mrs Yin, would place an unreasonable burden on ASIC to take urgent steps in the proceedings (should it wish to be heard), rather than ASIC having the opportunity to engage with Mrs Yin about her proposed order without the cost and possible inconvenience of an appearance.
To allow the amendment and to grant an adjournment would cause an unnecessary and inappropriate burden on the Court and would negatively impact on other litigants’ entitlement to hearing dates: see eg Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [5] (French CJ) and [102] (Gummow, Hayne, Crennan, Kiefel and Bell JJ). This matter was set down for hearing on 11 October 2024 and no further delay is appropriate.
Had her case been prepared and conducted differently, it might have been appropriate to make an order under s 1322(4)(b) to direct ASIC to withdraw the Form 484 lodged on 23 July 2023 by Mr Maalouf from the registers kept by ASIC, to in effect rectify the register to the former position. However, in the circumstances, I am not prepared to make such an order.