Case Study Assignment 2022

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CASE STUDY
The case study deals with the doctrine of Indoor
Management or Turquand Rule, Section 125
and 126 of the Corporations Act 2001.

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The issue in the case is whether:
 The Bank would be entitled for the remedy in the case.
 The Bank would ideally be entitled for the remedy in the
case.
 The outcome would have been different if:
i. The loan was for refurbishment of two of Sparkling’
clothing shops.
ii. The bank’s loan officer knew Sarah had fallen out of
favour with the Board and was negotiating a new job.
Issues

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 Also called the Turquand Rule
 It was established in the decision of Royal British Bank vs.
Turquand (1856) 6 E&B 327.
 Company’s indoor affairs meaning that such affairs are company’s
internal matters and hence, belong to the governance issues of the
company (Seely 2018). There is no third party interest involved in
such affairs.
 Exception to the general rule of constructive notice (Maloka 2017).
 Further applied in Mahony vs. East Holyford Mining Co. (1875)
LR 7 HL 869.
DOCTRINE OF INDOOR MANAGEMENT