Yin v Maalouf [2025] NSWSC 450 – Sham Share Transfers, ASIC Filings, and Misrepresentation in Corporate Disputes

In a recent decision handed down by the New South Wales Supreme Court, Yin v Maalouf [2025] NSWSC 450, Justice Peden dealt with a complex corporate dispute involving an allegedly sham Share Purchase Agreement, misleading conduct, and the improper use of ASIC filings to alter directorship and shareholding records. The case underscores the importance of substance over form in commercial dealings, and the limits of corporate register filings when unsupported by lawful authority.

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Background

From early 2023, Mrs Sodaline Yin was the sole director and shareholder of Wraich Pty Ltd, having acquired the shareholding as part of a property settlement following the breakdown of her marriage. However, in July 2023, she discovered that Mr Roy Maalouf had lodged a Form 484 with ASIC, falsely recording himself as Wraich’s sole director and shareholder.

Mrs Yin promptly commenced proceedings seeking rectification of the ASIC register and declaratory relief confirming her position within the company.

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Key Issues

The Court was required to determine several key questions:
1. Whether Mrs Yin had entered into a binding Share Purchase Agreement transferring her share to Mr Maalouf.
2. Whether the Share Purchase Agreement was a sham.
3. Whether Mr Maalouf misled ASIC and Mrs Yin in lodging the Form 484.
4. Whether relief under section 1322(4)(b) of the Corporations Act 2001 (Cth) should be granted to rectify the ASIC register.
5. Whether the hearing should proceed in Mr Maalouf’s absence.

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The Alleged Share Transfer

Mr Maalouf claimed that Mrs Yin had agreed to transfer her shareholding in Wraich to him under a Share Purchase Agreement for $1.2 million. However, he did not appear at the hearing and failed to present any evidence supporting this assertion.

Mrs Yin, on the other hand, gave consistent and credible evidence that she never intended to transfer her shareholding. She had engaged Mr Maalouf solely to provide advisory services and to negotiate with Wraich’s co-investors for a buyout of development projects. For this, she paid him $2,000.

Crucially, Mrs Yin testified that Mr Maalouf presented her with a Share Purchase Agreement in April 2023 and told her it was merely a tool to convince co-investors that he held authority to act. She was explicitly assured:

“I am not really buying your share. This is the only way I can help you get your investment back.”

The Court accepted Mrs Yin’s evidence and found that there was no genuine intention to effect a share transfer. The purported agreement was a sham—used as a device to give the appearance of authority, rather than to legally effect change.

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Sham Agreements and Lack of Intention

Justice Peden reiterated a key principle in contract law: a document signed by parties may not constitute a legally binding agreement if it was never intended to be effective. Here, both parties knew the Share Purchase Agreement was not genuine.

The Court found that:
• Mrs Yin did not resign as director or sign any resolution appointing Mr Maalouf.
• No consideration was ever paid by Mr Maalouf.
• Mrs Yin continued to act as owner and director of Wraich, including by authorising Mr Maalouf to negotiate on her behalf in May 2023—behaviour inconsistent with having sold her interest.

In effect, both parties were complicit in misleading Wraich’s co-investors into believing Mr Maalouf had authority, but this did not translate into a legal transfer of ownership.

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Improper ASIC Lodgement

On 24 July 2023, Mr Maalouf signed a Form 484 asserting he was the sole director and shareholder of Wraich. The form was lodged with ASIC the following day by Mrs Yin’s accountant’s firm, without her consent or knowledge.

The Court emphasised that such lodgement does not effect legal changes to shareholding or directorship. Instead, Form 484 is a notification mechanism—not a transaction in itself.

Justice Peden affirmed prior authority (e.g. Chidiac v Bhatt [2014] NSWSC 1253) that ASIC filings must reflect lawful corporate changes, not purport to effect them. Since there was no valid share transfer or directorial appointment, the Form 484 was false and legally ineffective.

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Misleading Conduct and Misrepresentation

Mrs Yin pursued claims under:
• Section 18 of the Australian Consumer Law (ACL) – misleading or deceptive conduct; and
• Fraudulent misrepresentation.

She argued that Mr Maalouf misled her and ASIC, causing her to lose her shareholding and directorship.

However, these claims failed. The Court found:
• There was no loss or damage because the Share Purchase Agreement was never legally effective.
• The Form 484 did not alter legal rights—it merely created an erroneous public record.
• ASIC did not rely on any misrepresentation in a legal sense because the Form 484 is accepted on face value and does not trigger legal change.

Thus, although Mr Maalouf engaged in misleading conduct, it did not cause the legal harm alleged.

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Rectification of ASIC Register

Mrs Yin sought an order under section 1322(4)(b) of the Corporations Act, asking the Court to direct ASIC to rectify its records.

While such orders can be made where no substantial injustice arises, the application was problematic. ASIC was neither joined to the proceedings nor properly notified before the application. Justice Peden cited several authorities emphasising the importance of involving ASIC in such matters (e.g. Re Bean & Sprout Pty Ltd [2018] NSWSC 456).

Despite a last-minute effort to notify ASIC and seek either an adjournment or a “stay of execution” of any rectification order, the Court refused to grant relief. Doing so would impose an unreasonable burden on ASIC and delay finalisation of proceedings that had already been pending since 2023.

Importantly, the Court concluded that no order was needed: Mrs Yin remained the lawful shareholder and director, as the Form 484 had no legal effect.

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Proceeding in the Defendant’s Absence

Although Mr Maalouf was absent from the hearing, Justice Peden was satisfied that he had been given every opportunity to attend.

At a directions hearing on 7 May 2025, he:
• Confirmed he had terminated his lawyer;
• Stated he was seeking new representation;
• Was informed of his obligation to file a motion if he sought an adjournment.

He took no further steps and did not appear at the hearing. In such circumstances, under Rule 29.7 of the Uniform Civil Procedure Rules, the Court had discretion to proceed.

Further, under Rule 36.16(2)(b), any judgment made in a party’s absence can later be set aside if fairness requires it.

The Court found that proceeding was not only justified but necessary to avoid undue delay and disruption to the administration of justice.

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Outcome and Orders

The Court made the following key orders:
1. Declared that the only binding agreement between Mrs Yin and Mr Maalouf was an oral agreement for advisory services in return for $2,000.
2. Declared that Mrs Yin remains the sole shareholder and director of Wraich Pty Ltd.
3. Ordered Mr Maalouf to pay Mrs Yin’s legal costs.

Importantly, the Court did not order ASIC to amend its register—though it hinted that, had the application been properly framed and served, such relief might have been granted.

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Key Takeaways
• ASIC forms cannot create legal rights—they merely reflect existing ones.
• Sham agreements entered without genuine intent to bind are not enforceable.
• Misleading conduct must cause actual legal or financial loss to support a claim under the ACL.
• Rectification of ASIC records under s 1322(4)(b) requires proper notice to ASIC and careful procedural compliance.
• Courts can proceed in the absence of a defendant if procedural fairness has been satisfied.

This case is a timely reminder for company directors and shareholders to treat share transfers, ASIC filings, and contractual dealings with utmost formality, clarity, and legal advice.

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