§ 5 After Clause 5, insert the following new clause:
§ Amendment of section 2 of Trusts (Scotland) Act 1961.
§ '.In section 2 of the Trusts (Scotland) Act 1961 (validity of certain transactions by trustees), for subsection (2) there are substituted the following subsections—
§ "(2) Nothing in subsection (1) of this section shall affect any question of liability between any of the trustees on the one hand and any co-trustee or any of the beneficiaries on the other hand.
§ (3) Without prejudice to the operation of subsection (1) of this section, where in relation to the trust estate or any part thereof a judicial factor thinks it expedient to do any of the acts mentioned in that subsection but the act in question might be at variance with the terms or purposes of the trust, he may, subject to the following provisions of this section, apply to the Accountant of Court for his consent to the doing of the Act.
§ (4) Where an application is made under subsection (3) of this section to the Accountant of Court for his consent to the doing of an act to which that subsection applies, he may grant the application subject to such conditions (including conditions as to price) as he thinks fit if—
- (a) he considers that the doing of the act is in the best interests of the owner of the trust estate to which the judicial factor's appointment relates or of any person to whom the owner owes a duty of support; and
- (b) he is satisfied—
- (i) that the judicial factor is not expressly prohibited by the terms of his appointment from doing the act; and
- (ii) that there has been compliance with the provisions of subsection (5) of this section and of any rules made there-under; and
- (c) no objection is made to the doing of the act under subsection (5) of this section.
§ (5) A judicial factor proposing to make an application under subsection (3) of this section to the Accountant of 1889 Court shall notify such persons or such class or classes of persons as may be specified in rules of court in such manner as may be so specified of the proposed application, the act to which it relates, and of their right to object to him doing that act within such time and in such manner as the rules may specify, and the rules may make different provision in respect of different classes of judicial factors, and may make provision exempting a judicial factor or a class of judicial factors from giving notification under this subsection in such circumstances as the rules may specify.
§ (6) Where a judicial factor does any act in accordance with the consent of the Accountant of Court granted under subsection (4) of this section and in compliance with the provisions of this section and of any rules made thereunder, it shall be treated as being not at variance with the terms or purposes of the trust.".'
§ 7.21 p.m.
§ Lord MACKAY of CLASHFERNMy Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 5. This amendment also introduces a new clause. It gives effect to the recommendations contained in the Scottish Law Commission's report on powers of judicial factors, which is their Report No. 59. The clause was appended to the Commission's report. The clause amends Section 2 of the Trusts (Scotland) Act 1961, by adding a provision to the effect that where a judicial factor acting with the consent of the accountant of court did any of the acts mentioned in specified paragraphs of Section 4(1) of the Trusts (Scotland) Act in relation to the estate under his charge, not being an act prohibited by the terms of his appointment, the factor would not be subject to liability on the ground that the act in question was at variance with the terms or purposes of his appointment. A provision on these lines would seem to introduce a worthwhile flexibility in the actings of judicial factors, and make it relatively easy for them to proceed in this area. The clause was introduced during the Commons Committee stage of the Bill by Mr. Peter Fraser. My Lords, I beg to move.
§ Moved, That the House doth agree with the Commons in the said amendment.—(Lord Mackay of Clashfern.)