Functions of judicial factor
29.Section 13(1) provides that the general function of judicial factors is to hold, manage, administer, and protect the factory estate, for the benefit of those who have an interest in that estate. This is a fiduciary duty which is placed on judicial factors, whose actions in respect of the factory estate must always be for the benefit of persons with an interest in the estate. Subsection (2) clarifies that the general function is subject to variation by the court, in the interlocutor appointing the judicial factor (under section 14(1)), or subsequently following an application having been made to the court (section 14(2)).
30.Subsection (3) places judicial factors under a duty, when carrying out either the general function, or any of the factory functions, to exercise care, prudence, and diligence, and to take professional advice, such as from a solicitor or an accountant, when appropriate – consulting with the Accountant as to whether it is appropriate, if required, under subsection (4).
31.Subsection (5) prohibits judicial factors from delegating the general function or any factory function unless that delegation has been authorised in the appointing interlocutor or by the Accountant, or is provided for elsewhere in the Act or any other enactment. The factory functions are defined in subsection (7) as meaning the standard powers and the various functions conferred on judicial factors by virtue of sections 15 to 22 of the Act. These are subject, in either case, to: any variation made by the court in appointing the judicial factor or subsequently following an application having been made to the court; any other provision of law which impacts on the judicial factor’s powers. The factory functions also include any additional function conferred on a particular judicial factor by the court under section 14(1) or (2). The standard powers are defined as meaning all of the powers of a natural person beneficially entitled to the estate. This means that the judicial factor is entitled to do anything in relation to the estate which an individual who owned the estate would be entitled to do. An illustrative list of such powers is set out in schedule 1, but a judicial factor may exercise a power which a natural person entitled to the factory estate would be entitled to carry out even where that power does not appear on the list in schedule 1.
32.Subsection (6) provides that, on the appointment date or the date on which the Accountant confirms that the requirement to find caution has been found (if applicable), the standard powers, as defined in subsection (8), are transferred to the judicial factor.
