Howard Smith Ltd v Ampol Petroleum Ltd [1974] UKPC 3 is a leading company law case, concerning the duty of directors to act only for "proper purposes".

‘To define in advance [what that means is] impossible.’ It must be adjudged ‘in the light of modern conditions’, and referred back to Hogg v Cramphorn Ltd.[2] His judgment continued.

The extreme argument on one side is that, for validity, what is required is bona fide exercise of the power in the interests of the company: that once it is found that the directors were not motivated by self-interest—i.e.

by a desire to retain their control of the company or their positions on the board—the matter is concluded in their favour and that the court will not inquire into the validity of their reasons for making the issue...

Self-interest is only one, though no doubt the commonest, instance of improper motive: and, before one can say that a fiduciary power has been exercised for the purpose for which it was conferred, a wider investigation may have to be made...