Christchurch investment adviser Hamilton Hindin Greene alleges former director James Small is stringing out legal action over a disputed $2.15 million payout as revenge, angered after having been pushed out. He disputes EY’s valuation on a compulsory buy-out for his thirty per cent stake. He keeps receiving dividends while the dispute continues.
In September 2018, Mr Smalley ceased working for Hamilton Hindin. So long as he still holds shares, Mr Smalley is entitled to share in profits with dividends from the business. Since his 2018 departure, he has received dividends totalling about $899,000.
The High Court was told a Hamilton Hindin shareholders’ agreement required his shareholding to be valued on his departure by an independent valuer and that no challenge to the valuation was permitted. Ernst & Young was appointed valuer. Mr Smalley alleges its $2.15 million valuation failed to comply with professional standards. He refused to accept the valuation and refused to sign off on a transfer of his shareholding. Evidence was given that other Hamilton Hindin shareholders had taken out personal loans to fund the compulsory purchase; they are paying interest on these loans in the interim.
After a High Court hearing, Mr Smalley was ordered to sign the share transfer, failing that the High Court registrar was to sign on his behalf. Mr Smalley failed in a High Court application to block the registrar from signing. The court was told Mr Smalley was likely to appeal this failed application. Hamilton Hindin has given notice that payment of further dividends is suspended.
Williamson v. Smalley – High Court (26.07.22)
22.130