Continuing trustees retain title and interest to oppose a judicial factor’s proposals where the estate has not been sequestrated

Introduction

This commentary analyzes the Outer House decision of the Scottish Court of Session in Note by Alexander Lamb for special powers ([2025] CSOH 79), delivered by Lord Braid on 19 August 2025. The case arises from the administration of the Old Waughton Discretionary Trust, established by the late Ian James Wilson. Following an irretrievable breakdown in relations between the two trustees—Mrs Christine Wilson (the widow) and Mr Alexander Hodge (the respondent)—the court appointed Mr Alexander Lamb (the noter) as judicial factor with “the usual powers” in March 2019. Notably, the court did not sequestrate the estate into the factor’s hands; the original trustees technically remained in office.

The judicial factor proposed to sell the trust’s principal asset (Old Waughton Farm) and appoint the whole fund absolutely to the sole existing discretionary beneficiary, Mrs Wilson. The Accountant of Court supported this proposal. Mrs Wilson did not oppose; Mr Hodge lodged answers asserting that the trust purpose remained viable, that a beneficiary aligned with the truster’s letter of wishes could be selected, and that the court could appoint a further trustee to resolve deadlock. The immediate issue before the court was procedural: did Mr Hodge have title and interest to oppose the noter’s application? Lord Braid held that he did.

Summary of the Judgment

Title to oppose: The respondent remains a trustee because the estate was not sequestrated; the appointment of a judicial factor did not remove the trustees from office, even if it superseded their managerial powers for the time being. The judicial factor is himself a trustee for the purposes of the Trusts Acts. Accordingly, the respondent and the factor are parties to the same legal relationship regarding the trust estate, which suffices to found title (paras [10]–[11]).
Interest to oppose: A trustee need not demonstrate a personal patrimonial stake. The respondent’s answers serve an intelligible purpose consonant with fiduciary duty: he is the only realistic contradictor to a proposal that would wind up the trust in favour of the co-trustee/beneficiary, notwithstanding the truster’s letter of wishes and the possibility of alternative administration (paras [12]–[13]).
Outcome: The court refused to repel the respondent’s answers; fixed a 28-day period of mutual adjustment; declined to order further service on Mrs Wilson; and reserved expenses (para [14]).

Analysis

Precedents Cited and Their Influence

D & J Nicol v Dundee Harbour Trustees 1915 SC (HL) 7, at 12 (para [7]): Lord Dunedin’s classic formulation that a litigant must qualify “title and interest” underpins the court’s structured approach. Title requires that a party be part of a legal relation conferring a right that is infringed or denied. Here, the respondent’s continuing office as trustee and the factor’s status as a trustee created the requisite legal relationship.
Summerlee Iron Co Ltd v Lindsay 1907 SC 1161, at 1165 (para [9]): Emphasizing that title and interest “run into each other” guided the court to assess both together but distinctly—title as the juridical connection; interest as the practical utility or legal stake in the outcome.
Agnew v Laughlan 1948 SC 656, at 659 (para [9]): Clarifies that “interest” subsists where there is a benefit from asserting a right or preventing its infringement, or at least an intelligible purpose with potential prejudice to a legal right. This supported recognizing the respondent’s role as contradictor in furtherance of fiduciary duty.
McLauchlan v McLauchlan’s Trustees 1941 SLT 43, at 44 (para [8]): A defender who is called has a right to be heard, subject to arguments on interest. This underlies the court’s fair-process orientation.
Barry v Thorburn (1847) 9 D 917 and Morris v Bain (1858) 20 D 716 (para [10]): The older authorities pull in different directions on whether sequestration removes trustees from office. Lord Braid sidestepped the conflict because the present estate was not sequestrated; yet he highlighted the practical significance—if recall of the factory occurs, the trustees resume administration.
Shedden and others 1867 5M 955; Morison v Gowans (1873) 1 R 116 (paras [4]–[5], [10]): Cited for the proposition that the appointment of a factor does not, without more, extinguish a trustee’s title; recall remains possible.
Tennent’s Judicial Factor v Tennent 1954 SC 215, at 225 (para [10]): The factor is a “trustee” for the purposes of the Trusts Acts. This characterization was pivotal for Lord Dunedin’s “party to a legal relation” test, aligning the factor and the continuing trustee within the same juridical framework.
Carmichael’s Judicial Factor v Accountant of Court 1971 SC 295 (para [6]): Supports the desirability of a contradictor in judicial factor proceedings, reinforcing the court’s acceptance of the respondent’s participation.

Legal Reasoning

Lord Braid’s analysis proceeds in two stages—title and interest—mindful of their “run into each other” quality (para [9]).

First, the court focuses on title. The dispositive point is institutional: while the factor’s appointment superseded the trustees’ management powers, it did not remove the trustees from office because the estate was not sequestrated (para [10]). That continuing office is significant for two reasons:

There is at least a possibility of recall of the factory, which would restore the trustees’ administrative powers (paras [5], [10]).
The judicial factor is himself a trustee for statutory purposes, placing both the factor and the respondent within the same legal relationship regarding the trust estate (Tennent’s, para [10]). Under Lord Dunedin’s test, that suffices to found title.

The court rejected an absolutist reading of the unanimity rule (historically grounded in section 3(c) of the Trusts (Scotland) Act 1921) that would disable a single trustee from any procedural standing. While trustees generally must act collectively in litigating “by or against the trust estate,” there are clear exceptions where an individual trustee has title to act: petitioning for a judicial factor (as Mrs Wilson did here), being sued for an accounting, or seeking recall of a factory (para [10]). Hence, the respondent’s individual participation is not barred by collegiality rules.

Second, as to interest, the court looks for an “intelligible purpose” connected to legal rights or fiduciary obligations (Agnew). That threshold is comfortably met. The noter seeks drastic action—winding up the trust in favour of the co-trustee/sole current discretionary beneficiary, with the Accountant of Court’s support. The only contradictor able and willing to articulate an alternative consistent with the truster’s letter of wishes is the respondent (paras [12]–[13]). He asserts the trust purpose remains viable through the selection of an additional beneficiary and the possible appointment of a further trustee to break deadlock. Those are not idle or academic points; they go to the heart of the trust’s administration. Lord Braid accordingly recognizes the respondent’s interest.

Two further strands bolster the outcome:

Service “for any interest”: The noter had the note served on the respondent “for any interest which he has therein” (para [11]). While not determinative, this procedural step sits uncomfortably with the noter’s attempt to deny title altogether.
Interest versus relevancy: The court flags the overlap between interest and relevancy (para [13]). Even if some averments were marginal, that is a matter for another day; the present gatekeeping question is standing, which the respondent plainly has.

Impact

This judgment will resonate across judicial factor practice and trust litigation in Scotland:

Standing of continuing trustees: It clarifies that the appointment of a judicial factor, without sequestration, does not extinguish a continuing trustee’s title and interest to oppose the factor’s applications. That trustee can serve as the necessary contradictor safeguarding the trust’s interests.
Balanced oversight of factor proposals: Even where the Accountant of Court supports a factor, the court welcomes a substantive contradictor—particularly where the beneficiary aligned with the proposal is also a trustee. This enhances the robustness of court oversight.
Limits of unanimity as a procedural barrier: The decision tempers rigid reliance on the unanimity/majority rule to stifle individual trustee participation in certain procedural steps. Individual trustees retain title in defined contexts.
Letters of wishes may receive meaningful forensic attention: While no merits decision is made, the court’s recognition that the respondent can argue for the weight of the truster’s letter of wishes signals that such documents can influence the trajectory of trust administration disputes.
Process economy and expense risk: The court prioritized procedural efficiency by declining further service on Mrs Wilson (para [14]) and warned that if the respondent’s opposition ultimately fails, expenses may follow (para [13]). Trustees contemplating opposition must weigh fiduciary duty against cost exposure.
Transitioning statutory framework: The judgment notes the soon-to-be-repealed section 3(c) of the 1921 Act. Practitioners should watch for how modern trust legislation governs collective action, while recognizing that this decision preserves standing for individual trustees in appropriate circumstances.

Complex Concepts Simplified

Judicial factor: A court-appointed officer who temporarily administers property (here, trust assets) where management has broken down. The factor owes duties to the court and is supervised by the Accountant of Court.
Sequestration (in the judicial factor context): Transfer of the estate into the factor’s hands. If an estate is sequestrated, authorities conflict on whether trustees remain in office. In this case, the estate was not sequestrated, so the trustees remained in office even though their powers were superseded.
Title and interest: In Scots procedure, a party needs both a juridical connection to the right (title) and a practical or legal stake (interest). A trustee’s fiduciary responsibilities can supply interest even without personal financial gain.
Contradictor: A party who opposes or tests the moving party’s case, enabling the court to hear both sides. In factor applications, a contradictor helps avoid one-sided decisions.
Discretionary trust: A trust where the trustees have discretion over which beneficiaries benefit and to what extent. A letter of wishes is not binding but can guide trustees and the court on the truster’s intentions.
Recall of judicial factory: The court can end a factor’s appointment and restore management to trustees if circumstances warrant. The possibility of recall helps sustain a continuing trustee’s title.
Answers and adjustment: In Court of Session procedure, “answers” are the respondent’s pleadings. A “period of adjustment” allows parties to refine averments before further procedure.

Conclusion

Lord Braid’s decision establishes a clear procedural principle: where a judicial factor has been appointed without sequestration, a continuing trustee retains both title and interest to oppose the factor’s applications that materially affect the trust’s administration and potential distribution. The factor’s superseding of managerial powers does not annihilate the trustee’s office or fiduciary responsibilities, and the trustee can serve as a legitimate contradictor—especially when the proposed course would wind up the trust in favour of a co-trustee/beneficiary and when alternative paths arguably accord better with the truster’s wishes.

The judgment also refines the interface between collective trustee action and individual standing: unanimity norms do not preclude individual trustees from engaging the court in certain procedural contexts, including factor appointments, accountings, and recall petitions. Practically, this promotes fuller scrutiny of consequential proposals, maintains adversarial balance, and anchors decision-making in fidelity to the truster’s purposes, while cautioning that unsuccessful opposition may carry expense consequences.

Key takeaway: Continuing trustees are not mere bystanders after a judicial factor’s appointment. Absent sequestration of the estate, they remain office-holders with standing to test factor-driven proposals—ensuring that the court hears a principled counter-case before authorizing irreversible steps in the life of a trust.