Mayor's family sue law firm over unwell father's $1m gifts to employees

Christchurch Mayor Phil Mauger and his siblings are suing a law firm that advised their late father before he gave more than $1 million to two employees. 

The High Court at Christchurch has now ordered Saunders & Co to provide a more detailed list of documents it says are privileged, after a doctor drawn into the case challenged the firm’s disclosures. 

Warner Mauger, a mechanic who became a successful businessman and philanthropist, signed two deeds in December 2018 gifting $1.035 million to two employees, according to a High Court judgment seen by the Herald. 

The Press has identified the employees as Simon Tucker and Louise Hermansson, who were to receive $550,000 and $485,000 respectively. 

According to the judgment, the $1.035m was transferred from Warner Mauger’s personal bank account to Saunders & Co’s trust account. 

His solicitor, former Saunders partner Cran Bull, told him the firm would not pay the employees until he obtained a medical certificate confirming he had capacity to make the gifts. 

In January 2019, Mauger’s doctor, Harsed Chima, certified that he was “currently of sound mind”. 

Mauger, who had dementia, later went to court through his daughter Penelope Cron to recover the money. 

He died in November 2020, and Cron and her brothers Phil, Timothy and Stephen continued the action against the employees. 

That case settled in 2024. 

The siblings then sued Saunders, alleging its advice about the gifts was deficient. 

Saunders has brought a separate claim against Chima, who denies the allegations against him. 

Chima argues one of the firm’s claims against him was filed outside the ordinary six-year time limit. 

Saunders says it did not know it might suffer a loss until the siblings formally notified it of potential claims in October 2023. 

To test that account, Chima sought earlier documents, including communications with Saunders’ insurer. 

The firm argued documents predating the October 2023 letter were irrelevant and had listed groups of documents as privileged. 

Associate Judge Bill Gambrill found earlier documents could be relevant to what Saunders knew and when. 

The firm was ordered to individually list the challenged documents and specify the basis and start date of any privilege claim. 

In a separate application, Saunders sought answers from Chima about his usual practice when assessing patients’ capacity and what he said to Mauger’s solicitor. 

Judge Gambrill declined to require answers to the disputed questions, saying they could be put to him in cross-examination. 

The ruling deals with preparations for the trial and does not decide whether the firm or the doctor was negligent. 

The case is set down for trial on February 22 next year. 

Ben Tomsett is a journalist based in Dunedin. He joined the Herald in 2023.