Alexander Lamb for Special Powers (Court of Session)

Factual and Procedural Background

This opinion concerns an application by the judicial factor on the assets of Trust A for special powers under section 7 of the Judicial Factors Act 1849. The Deceased had created Trust A, whose principal asset was Farm A, and had appointed Trustee A and Trustee B as trustees; the beneficiaries included Trustee A and any other individual or charitable or educational body selected by the trustees. The Deceased also signed a letter of wishes expressing, among other things, a hope that Farm A might be used by a young person wishing to farm, and that the farm should remain a single unit. [Para 13][Para 25][Para 28][Para 33][Para 35]

The relationship between Trustee A and Trustee B broke down irretrievably, and on 13 March 2019 the court appointed the Applicant as judicial factor with the usual powers, without sequestrating the estate into the Applicant's hands. The Applicant later concluded that the trust should be wound up in favour of Trustee A as the sole discretionary beneficiary, identified a purchaser for Farm A, and sought special powers to sell the farm and to appoint that the whole trust fund be held absolutely for Trustee A. Trustee B opposed the application and maintained that the trust purpose remained capable of being fulfilled and that he was willing to select a beneficiary. Lord Braid had earlier refused to repel Trustee B's answers and allowed a proof, and this opinion followed that proof. [Para 16][Para 17][Para 38][Para 45][Para 46][Para 47]

Legal Issues Presented

1. Whether, under section 7 of the Judicial Factors Act 1849, it was expedient and consistent with due regard to the amount of the estate to grant the Applicant special powers to sell Farm A and to appoint the trust fund to be held absolutely for Trustee A. [Para 116][Para 121]
2. Whether Trustee B's objection—that the trust purpose remained capable of fulfilment and that further trustees could be appointed—made the Applicant's requested powers unnecessary or otherwise inappropriate. [Para 104][Para 128]

Arguments of the Parties

Applicant's Arguments

• The Applicant submitted that the relevant test was expediency under section 7, not necessity, and that the requested powers fell outside the "usual powers" of a judicial factor. [Para 86][Para 120][Para 133]
• The Applicant argued that continuing the judicial factory was not in the trust's interests because the trustees remained deadlocked, no further beneficiary had been identified, and no realistic prospect existed of resolving matters by further cooperation. [Para 89][Para 92][Para 95][Para 96]
• The Applicant maintained that selling Farm A to the proposed purchaser and distributing the proceeds to Trustee A was consistent with the letter of wishes, because the document contemplated sale, required provision for Trustee A, and left the trustees discretion as to how any transfer to a new farmer would be effected. [Para 98][Para 99][Para 122][Para 125][Para 154]
• The Applicant submitted that the proposed purchaser was appropriate because he had provided a business plan, had an interest in farming, and intended to continue operating the farm as a single unit. [Para 56][Para 59][Para 155]

Respondent's Arguments

• Trustee B argued that there was a continuing trust purpose capable of being fulfilled and that the powers sought were unnecessary. [Para 104][Para 128]
• He submitted that selling Farm A to the proposed purchaser would not give effect to the Deceased's wishes because the purchaser was not young and was not a new entrant to farming. [Para 109][Para 111]
• Trustee B also argued that appointing Trustee A as sole beneficiary went beyond the language of "suitable financial provision" for Trustee A. [Para 109][Para 158]
• He contended that the court could appoint a further trustee to break the deadlock, and that he remained willing to co-operate in that process. [Para 104][Para 111][Para 141]

Table of Precedents Cited

Court's Reasoning and Analysis

The judge held that the correct question under section 7 was whether the proposed powers were expedient, not whether they were strictly necessary. That distinction mattered because the existence of possible alternatives did not prevent a course being expedient. [Para 121][Para 133]

The judge accepted that the trust's deadlock remained the central practical problem. The evidence showed that the trustees' relationship had not improved since the Applicant's appointment, that no meaningful progress had been made, and that it was highly unlikely the trustees would identify a new beneficiary or new trustee in any realistic timescale. [Para 122][Para 138][Para 140][Para 141]

In construing the letter of wishes, the judge treated paragraph 7 as important because it showed that the Deceased was expressing wishes to assist his trustees, not issuing binding instructions. The judge also placed weight on the fact that the Deceased had been advised about the possibility of deadlock but nonetheless chose the trust structure he did. [Para 147][Para 150][Para 152]

The judge viewed the wish to provide suitable financial support for Trustee A as more definite than the hopes expressed about the future of the farm. On that reading, selling the farm to the proposed purchaser did not materially conflict with the letter of wishes: it would provide for Trustee A, keep the farm as a single unit, and give a person interested in farming the chance to run it. [Para 151][Para 154][Para 155]

The judge rejected the respondent's focus on the purchaser's age and prior experience, noting that "young" is a relative concept and that the letter of wishes did not use the phrase "new entrant". The judge was also unpersuaded by the suggestion that appointing the whole fund to Trustee A exceeded the Deceased's intentions. [Para 156][Para 158]

Finally, the judge concluded that there was no reasonable or realistic alternative to the Applicant's proposal. Continued administration by judicial factory would only prolong expense and limbo, and the proposed sale was therefore expedient and consistent with due regard to the estate. [Para 160][Para 161][Para 162]

Holding and Implications

GRANTED. The court granted the Applicant the two special powers sought and reserved the question of expenses. The direct effect was to permit the sale of Farm A and the winding up of the trust administration in favour of Trustee A; the opinion is fact-specific and does not discuss broader implications beyond applying section 7 to these circumstances. [Para 165][Para 166]