Section 7 Judicial Factors Act 1849: “Expedient” (Not “Necessary”) as the Threshold for Special Powers to Sell and Wind Up a Trust amid Trustee Deadlock

1) Introduction

In Alexander Lamb for Special Powers [2026] CSOH 73, the Outer House of the Court of Session (Lord Richardson) considered an application by a judicial factor (the noter) seeking special powers under section 7 of the Judicial Factors Act 1849. The judicial factory had been in place for approximately six years due to an irreparable breakdown between the two trustees of a discretionary trust whose principal asset was a farm.

The noter sought authority (i) to sell the farm to a proposed purchaser for full value; and (ii) to appoint that the entire trust fund be held absolutely for the benefit of the only currently identified discretionary beneficiary (the truster’s widow). One trustee supported the noter’s steps in practice by not opposing the note; the other trustee (the respondent) opposed, contending that the trust purposes remained capable of fulfilment (particularly in light of the truster’s letter of wishes) and that alternative steps—such as appointing an additional trustee—could be pursued.

The judgment is significant for its clear statement that the statutory test is “expediency”, not “necessity”, and for its pragmatic approach to deadlock-driven stagnation: where trustee deadlock is entrenched and the judicial factory is draining the estate, the court may sanction sale and winding-up as an expedient course even if theoretical alternatives exist.

2) Summary of the Judgment

  • Special powers granted: the noter was authorised to sell the farm on the terms approved by the Accountant of Court and to appoint the whole trust fund absolutely to the widow.
  • Core holding on the test: under section 7 of the 1849 Act, the relevant threshold is whether the proposed measure is “expedient” (and consistent with due regard to the estate’s amount), not whether it is “necessary”.
  • Deadlock treated as determinative context: the court found the trustee deadlock persisted unchanged since the judicial factor’s appointment and rendered progress towards selecting further discretionary beneficiaries unrealistic within any reasonable timescale.
  • Letter of wishes: construed as aspirational guidance, not binding instructions; the proposed sale and distribution were not materially inconsistent with it.
  • Evidence limits: extrinsic evidence purporting to prove subjective intentions (from the drafting solicitor and from the respondent trustee) was disregarded to the extent it strayed beyond admissible contextual background.
  • Expenses: reserved.

3) Analysis

3.1 Precedents Cited

Carmichael's Judicial Factor v Accountant of Court 1971 SC 295

This authority anchored the parties’ shared position (accepted by the court) that the powers sought were not within the judicial factor’s “usual powers”. The judgment reiterates the classical distinction: a judicial factor’s ordinary remit is to collect, preserve, and administer the estate; special powers are required where the measure involves steps beyond ordinary factorial management or entails the exercise of discretionary decisions akin to trusteeship (such as materially altering the trust’s structure or realising its principal asset for termination).

Marley v Rawlings [2015] AC 129

The case was invoked in argument about the boundary between admissible context and inadmissible “subjective intention” evidence. Lord Richardson accepted that background circumstances can assist construction, but held that evidence from the drafting solicitor that effectively expressed what the truster “intended” or what the letter “meant” was not competent for the purpose advanced and was disregarded to that extent.

Davidson (Robbie's Judicial Factor) v Macrae 1893 20 R 358

Cited by the respondent to support the proposition that the court could appoint an additional trustee to break deadlock. Lord Richardson did not reject the abstract competency point, but treated it as insufficient to defeat the note because the key statutory question was not whether other routes were possible, but whether the noter's proposal was expedient in the real-world circumstances of prolonged, unremedied deadlock.

[2025] CSOH 79 (Lord Braid)

Lord Richardson adopted Lord Braid’s earlier summary of the background and procedural posture. While not a binding precedent on the section 7 issue, it framed the factual matrix—particularly the enduring trustee breakdown and the limited issue previously debated (title/interest to oppose).

3.2 Legal Reasoning

(a) The statutory framework and the correct test

Lord Richardson treated section 7 of the 1849 Act as the controlling standard: the court may sanction special measures if it considers them “expedient and consistent with due regard to the amount of the estate at the time”. A central move in the reasoning was to reject the respondent’s repeated framing of the issue as whether the special powers were “necessary”. The court held that:

  • “Expedient” is a lower and different threshold than “necessary”.
  • The court may find a course expedient even where other theoretical alternatives exist.
  • The respondent’s focus on “necessity” drove arguments that were “beside the point” because they did not grapple with practical impediments to alternatives.

(b) Deadlock as a practical barrier to trust purposes

While acknowledging that the trust purposes “remain”, the court emphasised that in discretionary trust administration, purposes are not self-executing: they depend on trustees being able to exercise powers. Here:

  • Deadlock was the reason for the judicial factor’s appointment and was found to have persisted for six years.
  • There was no credible evidence of improved cooperation; the respondent’s asserted willingness to cooperate was discounted due to absence of concrete steps and the lack of communication between trustees.
  • The court accepted the noter’s assessment that agreement to add beneficiaries was “vanishingly unlikely”.

Accordingly, the respondent’s submission that trust purposes were “capable” of fulfilment did not answer the real question: whether fulfilment was realistically achievable within a reasonable period and without undue depletion of the estate.

(c) Appointment of an additional trustee: competent in theory, unrealistic in practice

The respondent argued that appointing a further trustee could break deadlock and enable selection of beneficiaries aligned with the letter of wishes. Lord Richardson treated this as speculative:

  • No evidence was led identifying the “independent” trustee referred to in pleadings.
  • No steps had been taken over six years to pursue such an appointment, despite legal representation.
  • The court viewed further contested litigation as unlikely to resolve matters on a reasonable timescale and unlikely to produce a meaningfully different substantive outcome.

(d) Construction and role of the letter of wishes

The court approached the letter of wishes as guidance to assist trustees, not binding instructions. Paragraph 7 was treated as pivotal: it acknowledged that wishes might not be achievable and left trustees with discretion.

On the substance:

  • The letter contained both definite and aspirational language. The instruction to “ensure” suitable provision for the widow (para 3) was contrasted with “hope” language about finding a young person/charity to take over the farm (paras 4–5).
  • The trust deed itself named the widow as the sole specified beneficiary class member and made her one of two trustees—effectively giving her a veto on selecting others. The court treated this structural choice (made with advice about deadlock risks) as legally significant when weighing competing “wishes”.
  • The proposed purchaser’s age and status did not create a material inconsistency. “Young” was treated as relative; “new entrant” was not the letter’s language; and the key theme—continued farming of the unit—was met on the evidence.
  • The letter contemplated sale in other contexts (paras 1–2), undermining an argument that sale was inherently contrary to the wishes.

(e) Extrinsic evidence of intention: limits enforced

Lord Richardson drew a line between admissible contextual background and inadmissible subjective intention evidence. Evidence from the drafting solicitor and the respondent was accepted only insofar as it described circumstances surrounding execution (e.g., the truster’s uncertainty, advice about deadlock), but disregarded where it purported to assert what the truster “intended” in a way that amounted to interpreting the text by private intention.

(f) Why the measures were “expedient”

The conclusion rested on a convergence of factors:

  • Prolonged deadlock preventing meaningful trust decision-making;
  • Only one identified beneficiary and no realistic route to selecting others;
  • Ongoing cost of a judicial factory diminishing the estate;
  • Accountant of Court support that the proposals were prudent and in the trust’s interest;
  • General alignment with the letter of wishes (financial provision; farm remaining a single unit under someone intending to farm it).

3.3 Impact

  • Clarified framing for section 7 applications: parties should address expediency (and due regard to the estate), not “necessity”. This is likely to influence pleadings, evidence selection, and the structure of submissions in judicial factor special-power notes.
  • Pragmatic management of deadlocked trusts under judicial factory: the judgment signals that the court will prioritise avoiding indefinite “limbo” administration that erodes value, especially where deadlock has proven entrenched.
  • Letters of wishes in Scots trust practice: the decision reinforces their non-binding nature and the importance of internal language (“ensure” vs “hope”) and trust architecture (e.g., veto dynamics) in evaluating how far a proposed course aligns with stated wishes.
  • Evidence discipline: litigants should be cautious about leading drafting-solicitor evidence aimed at proving “intention”; contextual evidence may be admitted, but interpretive opinion and subjective intention risk exclusion or being given no weight.

4) Complex Concepts Simplified

  • Judicial factor: a court-appointed manager of an estate/trust assets, typically appointed when those responsible cannot or will not manage them properly (here, because trustees were deadlocked).
  • Usual powers vs special powers: “usual powers” cover ordinary administration and preservation; “special powers” are needed for major steps outside ordinary management (e.g., selling a principal asset to wind up a trust; making dispositive appointments).
  • Discretionary trust: beneficiaries do not have fixed entitlements; trustees decide who benefits and when, within the deed’s permitted class.
  • Letter of wishes: non-binding guidance from the truster to trustees; helpful but not legally enforceable as if it were part of the deed.
  • “Expedient” under section 7: broadly, sensible and advantageous in the circumstances, having regard to the estate’s size and interests—without requiring proof that no other route exists.

5) Conclusion

Lord Richardson’s decision in [2026] CSOH 73 provides a clear, practice-facing statement that section 7 of the Judicial Factors Act 1849 turns on expediency, not necessity. In a long-running judicial factory caused by entrenched trustee deadlock, the court treated theoretical alternatives (such as appointing another trustee) as insufficient where they were not realistically likely to resolve the impasse within a reasonable time or without further depletion of the estate. Construing the letter of wishes as aspirational guidance—weighted by its internal language and the trust’s veto-prone structure—the court held the proposed sale and termination to be broadly consistent with the truster’s aims and, above all, an expedient route to end costly stagnation.