Integral Memory Plc v Watts
| Jurisdiction | England & Wales |
| Judge | Mr Justice Newey |
| Judgment Date | 23 February 2012 |
| Neutral Citation | [2012] EWHC 342 (Ch) |
| Court | Chancery Division |
| Docket Number | Reference: GLC 166/11 |
| Date | 23 February 2012 |
[2012] EWHC 342 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(ON TRANSFER FROM THE COURT OF PROTECTION)
IN THE MATTER OF THE MENTAL CAPACITY ACT 2005
The Rolls Building, Royal Courts of Justice
7 Rolls Buildings, London EC4A 1NL
Mr Justice Newey
Reference: GLC 166/11
Court of Protection No: 11772435
In the Matter of Arline Bette Rodman
Mr Andrew De La Rosa (instructed by Charles Russell LLP) for Mr Long
Mr Ulick Staunton (instructed by Reed Smith LLP) for Mr Shafer
Hearing dates: 2 February 2012
On 5 February 2010 Mr David Long was appointed as deputy for the property and affairs of Mrs Arline Rodman under the Mental Capacity Act 2005. The question raised by the present application is whether he should be replaced in that role. Mr Jared Shafer, who is now the general guardian of the estate of Mrs Rodman under an order made by a Court in Nevada, proposes that he should become deputy too, in Mr Long's place.
Basic facts
Mrs Rodman was born in 1932. She has always been a citizen of the United States, as was her late husband, Mr Norman Rodman. In the 1970s, however, the Rodmans moved first to Switzerland and then to London, where they lived at 4 Chesterfield Hill. They had four daughters: Linda, Barbara, Debra and Roberta.
By the time he settled in London, Mr Rodman had substantial assets. His investments took the form of certificates of deposit (or "CDs"). A web of offshore entities was established to deal in and collect income on the CDs. In total, some 21 entities were created in Panama and Liechtenstein. The various entities were used to facilitate systematic evasion of both British and American tax liabilities.
In 2003, Mr Rodman made a will naming his wife as the sole beneficiary and executrix of his estate. By the time he died in 2008, however, Mrs Rodman was under mental incapacity as a result of advanced Alzheimer's Disease.
In the years before his death, Mr Rodman had given his daughters various directions as to what should happen if he died. Among other things, sums of $4 million and $5 million were to be paid respectively to a Mr Vincenzo Basanese and a Mr Stephen Saunders. A sum of $15 million was to be set aside to provide for Mrs Rodman's care.
Mr Rodman's estate is estimated to have had a gross value of about $133 million when he died. Following his death, Mr Basanese and Mr Saunders received payments of $4 million and $5 million, and a sum of $15 million was deposited for Mrs Rodman's care. The majority of the remaining CDs (worth some $100 million) were shared between the four daughters without any personal representative having been appointed, without any effective consent from or on behalf of Mrs Rodman and without any provision having been made for outstanding tax liabilities. In October 2008, however, the US Internal Revenue Service ("the IRS") began to inquire into Mr and Mrs Rodman's tax affairs as a result, it seems, of third party disclosure of two of the Liechtenstein entities.
In the course of 2009, two of the Rodmans' daughters (Linda and Barbara) took proceedings for the appointment under the Mental Capacity Act 2005 of an interim property and affairs deputy for their mother. Mr Long was ultimately appointed as property and affairs deputy on 5 February 2010. By a recital to the Court of Protection's order, all four daughters recorded their willingness to co-operate fully with Mr Long.
As had been intended when Mr Long was appointed as deputy, he took steps to become administrator of Mr Rodman's estate. On 15 June 2010 he was appointed as administrator of the estate with the 2003 will annexed.
On 6 July 2010 an order was made in the Court of Protection providing for Mrs Rodman to be transferred to a property in Bedford, Westchester County, New York. There was reference in the order to the fact that a representative of the Official Solicitor had visited the property in question. The order also included an undertaking by the four daughters that, when their mother had returned to the United States, they would apply to be appointed as her welfare guardians and take appropriate steps to bring about the appointment of a "financial guardian (or conservator)".
In the event, without any further order having been made by the Court of Protection (or, it appears, any other Court), Mrs Rodman was moved to Nevada, to live in Las Vegas. It is not clear whether Mrs Rodman was taken to New York State at all. Mr Shafer has both said that Mrs Rodman "was not moved to Bedford in New York State" (in a witness statement of 27 May 2011) and referred to Mrs Rodman's "move from New York to Nevada" (in a witness statement of 13 October 2011). However, it appears from Mr Shafer's evidence that he does not have personal knowledge of what occurred (he speaks of having been told by the daughters that they "had" moved their mother to Las Vegas), and no direct evidence from any of the Rodmans' daughters is available.
On 25 January 2011 Mr Shafer was appointed to be the general guardian of the estate of Mrs Rodman by the District Court of Clerk County, Nevada. In practice, he does not appear to have had to do all that much in Nevada: he explains in one of his witness statements that the only funds that come into his hands are social security benefits of $2,100 a month. He has, however, taken a very active interest in both the English deputyship and the administration of Mr Rodman's estate. He has been provided with funding for litigation in this country by the Rodmans' daughters.
By an application issued on 15 March 2011, Mr Long applied for an order for the sale of the Chesterfield Hill property. On 28 April Mr Shafer asked that Mr Long's application be stayed "pending completion of an appraisal of the advantages and disadvantages" of sale. An order authorising sale had in fact already been made by Senior Judge Lush on 21 April, but both Mr Shafer (by an application notice dated 31 May) and two of the daughters (Debra and Roberta) asked that that order be reconsidered. Mr Shafer has not pursued his objection to a sale (as a result, he has explained, of being provided with further information by Mr Long), but one of the daughters (Debra) is still seeking to have the order for sale reopened.
The application notice of 31 May 2011 asked not only for a reconsideration of the order for sale, but for Mr Shafer to be appointed as deputy in place of Mr Long. Mr Shafer said in the witness statement in support of the application that he was "of the view that it could be in the best interests of Mrs Rodman for [him] to have responsibility for all of her affairs".
On 1 July 2011 Mr Shafer issued proceedings in the Chancery Division for (a) Mr Long to be replaced as Mr Rodman's personal representative and (b) bills which Charles Russell had rendered to Mr Long for work in connection with the deputyship and Mr Rodman's estate to be assessed pursuant to section 71 of the Solicitors Act 1974. Those proceedings remain to be determined.
By September 2011 Mr Shafer was also relying on matters relating to the assessment of costs as justification for Mr Long's removal as deputy. On 29 September 2011 Mr Shafer made a further witness statement in support of his application to be appointed as deputy in place of Mr Long. He gave as the grounds:
"that it is in [Mrs Rodman's] best interest for the legal costs incurred by Mr Long acting as her Deputy and also as personal representatives of the estate of Mr Rodman to be scrutinised and, if thought appropriate assessed by the courts".
The order by which Mr Long was appointed as deputy provided for his costs to be assessed on an annual basis. Charles Russell submitted their bill for 2010 for assessment on 26 June 2011. The bill is, I gather, in the hands of the Supreme Court Costs Office.
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