Part 2

Functions of judicial factor

Functions of judicial factor

Functions of judicial factor
13
1
It is the general function of a judicial factor to hold, manage, administer and protect the factory estate for the benefit of persons with an interest in the estate.
2
The general function is subject to—
a
any variation—
i
set out in the appointing interlocutor by virtue of section 14(1),
ii
made by the court by virtue of section 14(2),
b
any provision in any other enactment by virtue of which functions are imposed on or withheld from the judicial factor.
3
In exercising the general function and the factory functions a judicial factor must—
a
exercise care, prudence and diligence,
b
take professional advice when appropriate.
4
In complying with subsection (3)(b), the judicial factor may consult the Accountant as to whether it is appropriate to take professional advice in a particular case.
5
The judicial factor must not delegate the general function or any factory function except and to the extent—
a
authorised by the Accountant,
b
specified in the appointing interlocutor,
c
permitted under this Act or any other enactment.
6
The standard powers vest in the judicial factor—
a
on the appointment date, or
b
where the court has imposed a requirement to find caution, on the date on which the Accountant confirms to the court and the judicial factor in writing that the requirement has been satisfied.
7
In this section, “the factory functions” means—
a
subject to any variation made by the court by virtue of section 14(1)(a) or (2)(a), or any provision in any other enactment by virtue of which functions are imposed on or withheld from the judicial factor—
i
the standard powers,
ii
the functions set out in sections 15 to 22,
b
any function conferred by the court by virtue of section 14(1)(b) or (2)(b).
8
In this section and in section 14, “the standard powers”—
a
means all of the powers of a natural person beneficially entitled to the estate,
b
includes, in particular, the power to take any or all of the measures listed in schedule 1.

Power of court to specify functions of judicial factor

Power of court to specify functions of judicial factor
14
1
In appointing a judicial factor the court may specify in the appointing interlocutor—
a
that there is not conferred on the judicial factor any, or any part, of—
i
the general function,
ii
the standard powers,
iii
the functions set out in sections 15 to 22,
b
any additional function which is conferred on the judicial factor.
2
The court may, on the application of the judicial factor at any time after the appointment date—
a
relieve the judicial factor of any function conferred on the judicial factor by the appointing interlocutor,
b
confer an additional function on the judicial factor.
3
The judicial factor must intimate to the Accountant any application—
a
to be relieved of a function under subsection (2)(a),
b
for an additional function to be conferred under subsection (2)(b).
4
On receiving intimation under subsection (3) the Accountant must—
a
make such inquiry as the Accountant considers appropriate, and
b
submit to the court a report indicating whether, in the opinion of the Accountant, it would be expedient to grant the application.

Power of judicial factor to require information

Power of judicial factor to require information
15
1
A judicial factor may serve written notice on any person requesting that the person supply such information specified in the notice as the judicial factor reasonably considers relevant to the judicial factor’s functions.
2
A notice sent under subsection (1) must be accompanied by a certified copy of the appointing interlocutor.
3
A person who receives notice under subsection (1), other than a person mentioned in subsection (4), must comply with the notice without delay.
4
That person is—
a
a body to which paragraph 3 (reserved bodies) of Part III of schedule 5 of the Scotland Act 1998 applies,
b
a Minister of the Crown,
c
a department of the Government of the United Kingdom, or
d
a public body operating wholly in relation to a reserved matter within the meaning of the Scotland Act 1998.
5
A person who, having received notice under subsection (1), directs the judicial factor without delay to means by which the information can be obtained (either or both)—
a
under any other enactment,
b
free of charge,
is to be treated as having complied with the notice.
6
A person complying with notice under subsection (1) may charge the judicial factor a fee for supplying the information if that person is entitled under any other enactment to charge a fee for supplying the relevant information.
7
Nothing in this section authorises the making of a disclosure that contravenes the data protection legislation (but in determining whether a disclosure would do so, the provision made in this Act enabling or requiring the disclosure of information is to be taken into account).
8
In this section, “data protection legislation” has the meaning given by section 3(9) of the Data Protection Act 2018.

Ingathering

Ingathering
16
1
A judicial factor must ingather the factory estate.
2
The judicial factor may take such action as is necessary to complete title to property vested in the judicial factor by virtue of section 9.
3
The judicial factor must—
a
on becoming aware that a person is a creditor or debtor of the factory estate, inform that person of the judicial factor’s appointment,
b
ensure that financial assets forming part of the factory estate can be readily identified as being held by the judicial factor in the capacity of judicial factor.

Inventory and management plan

Inventory of estate
17
1
A judicial factor must, no later than 6 months after the appointment date, send to the Accountant—
a
an inventory of the factory estate,
b
any accompanying documents required by rules of court.
2
As soon as reasonably practicable following receipt of an inventory, the Accountant must notify the judicial factor that the inventory is approved—
a
without modification, or
b
subject to such modifications as the Accountant may require.
3
Before determining whether to require modifications to an inventory, the Accountant may request such further information as the Accountant considers appropriate.
4
The judicial factor and the Accountant must each sign a copy of the inventory, as approved by the Accountant, as constituting (subject to subsection (5)) a definitive statement of the factory estate as at the appointment date.
5
The judicial factor and the Accountant may, at any time and in such manner as the Accountant may determine, take account of information discovered after the inventory is signed under subsection (4).

Management plan
18
1
A judicial factor must, no later than 6 months after the appointment date, send to the Accountant—
a
a plan as to how the judicial factor intends to hold, manage, administer and protect the estate (a “management plan”), and
b
any accompanying documents required by rules of court.
2
As soon as reasonably practicable following receipt of a management plan, the Accountant must notify the judicial factor that the plan is approved—
a
without modification,
b
subject to such modifications as the Accountant may require.
3
Before determining whether to require modifications to a management plan, the Accountant may request such further information as the Accountant considers appropriate.
4
Where the Accountant requires modifications to a management plan, the Accountant must direct the judicial factor to resubmit the plan, by a date specified in the direction, with—
a
the modifications specified in the direction,
b
any further modifications which the judicial factor considers appropriate.
5
Subsections (2) and (3) apply to a management plan resubmitted under subsection (4) as they apply to the management plan submitted under subsection (1).
6
Where a management plan has been approved by the Accountant, the judicial factor—
a
must review the management plan—
i
from time to time (and at least annually), and
ii
whenever required to do so by the Accountant,
b
may modify the management plan at any time—
i
with the prior approval of the Accountant, and
ii
with the addition of any further modification required by the Accountant.
7
The judicial factor must hold, manage, administer and protect the estate in accordance with the management plan, if a management plan has been approved under subsection (2)(a).
8
The judicial factor must hold, manage, administer and protect the estate in accordance with the directions of the Accountant, if—
a
no management plan has been approved without modification, or
b
the Accountant has required a modification to the plan under subsection (6)(b)(ii) and that modification has not been effected by the judicial factor.
9
The judicial factor must report to the Accountant, at such intervals as the Accountant may determine, on the holding, management, administration and protection of the factory estate.
10
In this section, references to holding, managing, administering and protecting the estate are to be construed in accordance with the terms of the appointing interlocutor and any variation made to the functions of the judicial factor made by the court under section 14(2).

Submission of accounts, etc.

Submission of accounts, etc.
19
1
A judicial factor must, as soon reasonably practicable following the end of each reporting period, submit to the Accountant a report setting out the judicial factor’s intromissions with the factory estate during the relevant reporting period.
2
Reports submitted under subsection (1) must—
a
include accounts, and
b
be in such form and submitted in such way—
i
as may be agreed between the judicial factor and the Accountant,
ii
in the absence of such agreement, as directed by the Accountant.
3
In this section, “reporting period” means—
a
the period beginning on the appointment date and ending on the date specified by the Accountant, and
b
each subsequent period of the same duration.
4
The period specified under subsection (3)(a) must be—
a
not less than one year, unless the Accountant considers that there are exceptional circumstances which justify a shorter period, and
b
not more than 2 years.
5
The Accountant may, on cause shown, grant an extension of a particular reporting period provided that the reporting period as extended is not more than 2 years.

Investment

Investment
20
A judicial factor must—
a
consider whether, and if so how, it would be appropriate to invest some or all of the funds of the factory estate, and
b
if the judicial factor considers that it would be appropriate, invest the funds accordingly.

Claims

Enforcing or defending claims
21
1
A judicial factor must enforce or defend any claim in relation to the factory estate provided that the judicial factor is satisfied that to do so would be reasonable and prudent in all the circumstances.
2
The judicial factor may consult the Accountant as to whether it would be reasonable and prudent to enforce or defend the claim in a particular case.

Duty where estate object of dispute

Duty where estate object of dispute
22
1
This section applies where—
a
the factory estate was, immediately before the appointment of the judicial factor, not being managed adequately because persons who required to agree among themselves on how to manage it could not reach such agreement, and
b
the appointment was made wholly or mainly for that reason.
2
The judicial factor must, by whatever method the judicial factor considers appropriate in the circumstances, promote agreement between the relevant parties as to how to manage the estate.
3
Where the judicial factor considers that the appropriate method of promoting agreement under subsection (2) is mediation or arbitration, the judicial factor may—
a
act as mediator or arbitrator, as the case may be, or
b
appoint a suitably qualified person to act as mediator or arbitrator.
4
If agreement under subsection (2) is not reached, or does not appear to the judicial factor to be able to be reached, the judicial factor must formulate a scheme, which the judicial factor considers equitable, for the management or distribution of the estate.
5
A scheme under subsection (4) may comprise, in particular, the division and sale of all or part of the factory estate.
S. 13 not in force at Royal Assent, see s. 54(2)
S. 14 not in force at Royal Assent, see s. 54(2)
S. 15 not in force at Royal Assent, see s. 54(2)
S. 16 not in force at Royal Assent, see s. 54(2)
S. 17 not in force at Royal Assent, see s. 54(2)
S. 18 not in force at Royal Assent, see s. 54(2)
S. 19 not in force at Royal Assent, see s. 54(2)
S. 20 not in force at Royal Assent, see s. 54(2)
S. 21 not in force at Royal Assent, see s. 54(2)
S. 22 not in force at Royal Assent, see s. 54(2)