Sharebroker in nasty spat with fellow directors

An ugly dispute between a ‘‘highly resentful’’ director of an old established Christchurch sharebroking firm and his colleagues has been revealed in a High Court case.

In the proceeding, James Smalley, described by a judge as ‘‘antagonistic’’, ‘‘highly resentful’’ and ‘‘unhelpful’’, applied to put on hold a June court order forcing him to transfer his one-third shareholding in the firm Hamilton Hindin Green (HHG) to his former fellow directors for $2.15 million.

Smalley is appealing the court order to the Court of Appeal on the basis the share valuation is faulty and argues his position should be maintained until the disposal of the appeal.

HHG was established more than 100 years ago and has managed funds for generations of New Zealanders.

Smalley was ousted from the firm in September 2018 in what he believed was an act of betrayal and was obliged to sell his shares to fellow directors Grant Williamson, Ian Perry, David Hayes, Grant Davis and Jeremy Sullivan.

They commissioned an independent valuation on the condition the result not be challenged. Smalley disputed the valuation of $2,150,200 and refused to transfer his shares.

The latest decision shows Smalley’s fellow directors allege his motivation for his appeal is to ‘‘avenge his removal from the companies’’. Smalley told a fellow director in 2019 he felt betrayed and wanted ‘‘utu’’. Associate Judge Owen Paulsen,

refusing to put the transfer order on hold, said there was no suggestion Smalley’s fellow directors would be unable to pay for the shares whatever value they might be assessed at. Smalley would also receive $2,150,200 at the time of transfer.

Smalley had received gross dividends of $898,432 since September 2018 and his claims, if validated, could be worked into any future valuation, the judge said. He accepted Smalley’s fellow directors would suffer some financial cost if the order was put on hold.

‘‘The plaintiffs say . . . [Smalley] has been very successful in delaying and frustrating the valuation process at every turn . . .’’

Smalley had also brought proceedings against the HHG directors in the Employment Relations Authority disputing his holiday pay. He sought ongoing payment of dividends and threatened litigation, the judge said.

‘‘It is clear Mr Smalley harbours deep resentment against the plaintiffs, that he has maintained positions that are unreasonable throughout the valuation process and he is primarily responsible for the delays that occurred in completing it, adding significantly to the plaintiff’s costs.

‘‘I consider this a factor weighing against granting a stay,’’ the judge said.

The court had earlier criticised him for a great deal of unhelpful opinion, submission and speculation.

Smalley argued his right to challenge the valuation and get suitable relief from the court would be denied him if he was forced to transfer the shares. He needed to remain a shareholder so his shares could be valued at a later date.