BL-2024-000734 - [2025] EWHC 3003 (Ch)

The sixth ground is that I erred in concluding that the exercise of the power of appointing the Defendants was for a proper purpose. I think it is important to note that what I found was not that the Defendants had exercised the power for a proper purpose, but that the Claimants had no reasonable prospect of showing that the Defendant’s purpose was so improper that the court should decline to recognise its exercise (at [74]).

The Claimants say that this conclusion was not open to me in that they had pleaded a reasonable cause of action and where there might be further evidence that had a bearing on the matter.

In fact, I do not think it was open to me to come to any other conclusion. In Re Aartee Bright Bar (cited in [73]) it was held that it was entirely proper for a chargee to exercise a power to appoint an administrator for the purpose of enabling an independent office holder to take control of the assets. Since it is not disputed that that is exactly the object which the Chargee was seeking to achieve in this case, I cannot see that I have any basis for departing from that ruling. This ground of appeal therefore has no reasonable prospect of success.