"He walked over to the [tourist's] vehicle, opened the door and took the keys out, telling the driver he could collect them from the police station," Mr Smith said.
The film was shown to Mr Smith and the driver was issued an infringement notice for failing to keep left, the rental company was contacted and the driver's authority to drive was revoked.
Mr Smith would not say where the driver was from, but said he and his two passengers - his wife and 22-year-old son - were catching a bus to Christchurch.
"I would like to reiterate to the public not to take matters into their own hands, but rather take video footage, and contact police using *555 or 111.
"If the other driver stops, then stop as well if you can and wait for police to arrive," he said.
During the past week there have been reports of at least five incidents of keys being forcibly taken from drivers; in the main foreign visitors. As well, seven foreign drivers were caught in just three hours in the Te Anau-Milford district for driving offences last Thursday.
Last week two Chinese nationals were separately charged with dangerous driving, and issued an infringement notice, near Queenstown; both had their rental car contracts torn up.