Richard Edward Tomlinson v Brian Frederick Tomlinson & Ors

A settlement agreement may be enforced by an order equivalent to specific performance where a party breaches obligations to transfer property or fails reasonably to cooperate in giving effect to the settlement. Implementation may be iterative, and a party cannot insist that every document is perfect before executing any transfer.

Payment obligations are dependent where the agreement links them to prior performance of the counterparty’s principal obligations. Non-payment of a dependent instalment does not trigger an acceleration clause. Contractual construction is objective and based on the agreement read in context.

The parties were brothers who settled a long-running farming partnership dispute by a confidential Settlement Agreement. Richard was required to transfer his interests in land, while the defendants were required to make staged payments, provide security and give indemnities.

The defendants applied under a Tomlin Order for enforcement. Richard sought declarations for an accelerated balance of £600,000, interest and a tax indemnity after the £120,000 instalment due on 16 March 2023 was not paid. The issues were whether Richard had breached or evinced an intention not to perform, and whether the payment obligations operated independently of his transfer obligations.

1. Richard had breached the Settlement Agreement, alternatively evinced an intention not to perform, by failing reasonably to engage with the process for transferring the properties. The defendants were entitled to apply under the Tomlin Order.
2. The implementation process was iterative. Richard could not insist that every transfer and the Byways charge were complete before he executed any transfer. Outstanding details could be resolved through reasonable cooperation.
3. The court could make an order equivalent to specific performance even though some documents remained to be settled. The Settlement Agreement was sufficiently certain for the court to formulate the necessary wording.
4. On the true construction of clauses 3 and 6, the staged payment obligations were dependent on Richard’s performance of his obligation to transfer and relinquish his interests in the land at Completion. The £120,000 instalment had therefore not become due, and the acceleration clause had not taken effect.
5. Richard could invoke the tax indemnity, but payment was likewise dependent on his performance of his own obligations. His application for declarations and payment was dismissed.
6. The defendants’ application succeeded in principle. Consequential matters, including the precise form of order, permission to appeal and costs, were adjourned.

First-instance decision. The judgment records no prior appellate decision in this dispute.