There was some question as to the respective powers of the Governor and the Resident Commissioner, James Hurtle Fisher, and the two came into open conflict. Feeling ran high and when Hindmarsh went so far as to suspend Robert Gouger and other public officers, the commissioners brought the matter before the Secretary of State for the Colonies. Hindmarsh was then recalled to London in 1838. In 1840 he was made Lieutenant-Governor of Heligoland, where he served until 7 March 1857. Hindmarsh was knighted by Queen Victoria on 7 August 1851, and retired in 1857 to the seaside town of Hove, England.