An obligation to cooperate to achieve the terms of a settlement agreement to a Tomlin Order requires the parties to work together, otherwise the court can make an order akin to specific performance of the agreement.
The High Court has considered the terms of a settlement agreement in resolving enforcement applications in Richard Edward Tomlinson v Brian Frederick Tomlinson and others [2023] EWHC 2083 (Ch).
The case concerned the settlement of a longstanding family farming partnership dispute involving several sets of proceedings between four brothers and one of their wives, which was settled by an agreement dated 16 December 2021.
The settlement terms provided that the claimant, Richard, would transfer to the defendants, his brothers Brian, Barry and Michael, title to 18 properties mostly in their joint names but some including the name of their late mother, on the date of the agreement. In return, the brothers would pay Richard £1.1m in specified instalments over 63 months secured by a legal charge in his favour over one of the properties also to be executed on the date of agreement. The brothers agreed to cooperate with each other to put the agreement into effect, including the delivery of instruments or documents as necessary.
While several instalment payments were made to Richard, he failed to transfer the properties to the brothers and they did not provide the charge on 16 December 2021. Despite subsequent communications, the terms of settlement were not implemented. In March 2023, the brothers sought an order for Richard to sign the transfers and other forms to remove any restrictions on transfer in return for which they would pay the outstanding instalments due and a tax indemnity. Richard sought a declaration that he was entitled to payment of the balance of £600,000 as a result of failure to pay instalments due.
The court was satisfied that by July 2022 the brothers had, through their solicitors, made reasonable requests of Richard to take the necessary action to carry the settlement agreement into effect but Richard had consistently and unreasonably placed objections in the way of achieving this and focused on misconceptions. He was not entitled to insist on the brothers having all documentation in place before he was obliged to execute the transfers. Richard was in breach of the settlement agreement and the court was prepared to order the carrying into effect of the settlement agreement.
The brothers’ obligations to make the instalment payments to Richard were dependent on him performing his obligations to transfer the properties,so further payments were not due until he had done so.
Louise Clark is a property law consultant and mediator
