Mr Smart, owner of Catlins Surf school, said a friend had witnessed the attack and had seen the shark which came up underneath the man and knocked him off his surf board.
"He reckoned it was a couple of metres long - he said the dorsal fin wasn't too big."
Inspector Murray Hurst, of police southern communications, said the man suffered serious lacerations to his upper legs, and lost a lot of blood.
He was flown by helicopter to Southland Hospital.
A large crowd gathered as news of the attack spread, including a doctor and nurse.
"It was good to have the doctor on the beach, there was that initial shock and he was definitely in pain."
The attack came as a shock to Mr Smart, although there were reports of a shark hitting a surfer in nearby Colac Bay a few weeks ago.
"I've surfed the bay thousands of times and done thousands of instructions and thought of it as safe as a church."
Nick Stratford, the owner of Curio Bay Accommodation, said he had lived in the area for many years and had never seen a shark while out surfing.
"There are a whole lot of dolphins around here, but this is the first time I've heard of a shark coming near here. Sometimes we hear of someone seeing them further out, while on their boats, but never close to the beach."
Last month a junior Southland doctor made headlines around the world when he stitched up a wound caused by a shark attack while fishing near Cosy Nook, off the south coast.
James Grant fought off the shark, believed to be a sevengill, before he treated his wound and his mates took him to the hospital.
The last fatal shark attack in New Zealand waters was Auckland film- maker Adam Strange, 47, who was killed at Muriwai, Auckland in February 2013.
Additional reporting: Otago Daily Times, APNZ
