Giles Bark-Jones v Andrew Lynch

This is an appeal against the order of Ms Recorder Lambert KC given in the Central London County Court on 21 February 2025. Permission to appeal was granted on the papers by Sir Stephen Stewart on 19 September 2025. The appeal arises out of a claim to enforce a Tomlin Order.

The underlying dispute arises in this way. The Respondent Claimant is a solicitor and the principal of Bark & Co. The Appellant Defendant worked for Bark & Co from 2009 to 2016 as a tax senior manager. The parties fell into dispute. It appears that the Defendant left the employment of Bark & Co, but they sued him for sums that were said to be due and which arose mainly from allegedly overpaid commission, credit card spending and what are said to be secret commissions. The sum claimed in the Re-Amended Particulars of Claim is £415,362.

In 2016 the Claimant issued proceedings. The action proceeded slowly and was ultimately settled by a Tomlin Order, signed by the Claimant on 22 November 2017 and the Defendant on 16 November 2017. By an order of Judge Luba QC on 4 December 2017, the settlement was approved in the agreed terms and the action was stayed. The schedule to the Tomlin Order provided as follows:

“Confidential Schedule to Tomlin Order filed on [day] November 2017 in the County Court at Central London in respect of Claim No. C 01 RM 690

The parties have agreed the following terms of settlement as recorded in this Agreement:

1)

The Defendant owes to the Claimant the sum of £204,322.66 (“the Debt”). This sum is agreed by the parties as overpaid to the Defendant net of tax by the Claimant.

2)

In discharge of the Debt the Defendant undertakes to introduce legal work to the Claimant’s firm Bark & Co (“The Firm”). Such work shall be in respect of the core legal areas of the Firm, namely:

2.1

Criminal Fraud

2.2

White Collar Crime

2.3

Money Laundering; and

2.4

Civil Fraud.

3)

For the purposes of clause 2 in particular and of this Agreement in general the Firm may accept work in other areas at its absolute discretion. The Claimant may also reasonably refuse to accept work at its discretion.

4)

The value of the work, measured as actual billed and received funds as profit costs (exclusive of VAT), shall be no less than two times the amount of the Debt namely £408,645.32.

4.1

The work shall be introduced within a period of five calendar years from the date of the Tomlin Order which refers to this Agreement.

4.2

20% of this work (namely 20% of £408,645.32 which is £81,729.06) shall be introduced within the first 18 months of this Agreement.

4.3

If £408,645.32 is received in actual billed and received funds as profit costs (exclusive of VAT) within the first 18 months of this agreement, 10% (£40,864.53) shall be payable to the Defendant.

4.4

In relation to any sums received by the Firm as a result of work introduced by the Defendant pursuant to this Agreement, and where the value of the work (as defined in clause 4) exceeds £408,645.32, the Claimant shall pay to the Defendant a commission of 10% of the value of the work.

5)

If at the end of five calendar years from the date of the Tomlin Order the Defendant has not fulfilled his obligations under this Agreement, the balance of any unsatisfied part of the Debt (being the Debt less than one half of actual received funds for profit costs arising from work introduced by the Defendant pursuant to clause 2) shall fall immediately due as a contractual debt owed by the Defendant to the Claimant and the Claimant shall be entitled to exercise all available legal remedies, including (but not limited to) applying to the Court under Claim No. C 01 RM 690 to enforce the said debt.

6)

The Defendant shall be liable on an indemnity basis for all costs incurred in obtaining judgment and enforcing the debt (or any part thereof), should this so be required.

7)

Both parties agree that any issues and/or disputes arising out of the Claim herein are settled by this Tomlin Order and Agreement.

8)

If the Claimant ceases to trade as a firm of solicitors during the course of the Agreement then the Claimant will nominate a firm to which legal work shall be introduced. For this purpose, and generally meaning whether or not the Claimant ceases to trade as a firm of solicitors, the Claimant has an absolute right to assign this Agreement to any party who is a solicitor or a firm of solicitors.

9)

In the event of death of the Defendant during the course of this agreement, the Claimant shall have no call on the estate of the Defendant.

10)

In relation to the entirety of this Agreement, the parties owe each other a duty of utmost good faith.”

Therefore the Tomlin Order provided at (1) that the Defendant was indebted to the Claimant in the sum of £204,322.66, and at (2) to (4), a mechanism by which the Defendant could discharge that debt, namely by referring work to the Claimant. The work needed to be billed and received in order for it to be set against the debt. By (5) at the end of five years the unsatisfied debt would immediately fall due as a contractual debt.

It appears to be common ground that the Defendant introduced no work which led to monies being billed and received. It is also common ground that clauses 2.1, 2.2 and 2.3 are, and at all material times were, unenforceable because they offended against the Solicitors Regulation Authority’s prohibition on referral fees in criminal cases.

After five years, the debt not having reduced, the Claimant sought to enforce the Tomlin Order pursuant to clause 5. It sought to do this by issuing an application dated 20 April 2023.When the matter came before Her Honour Judge Baucher in December 2024, the Defendant opposed the application. He argued that the Tomlin Order was unenforceable, and that the Court should instead revive the original proceedings and deal with the underlying dispute upon it merits.

The Claimant therefore sought, in the alternative, summary judgment on the basis that the Tomlin Order contained an admission of a debt.

The Claimant met the argument that the Tomlin Order was unenforceable by seeking the application of the blue pencil test, in other words, the excision of clauses 2.1, 2.2 and 2.3.

The matter came before Recorder Lambert KC on 17th and 18th February 2025. In her reserved judgment she accepted the Claimant’s arguments, excised the objectionable clauses and held that the rest of the Tomlin Order was enforceable. She duly enforced it, and she further gave summary judgment on the basis of the admission in clause 1.

I turn to the Grounds of Appeal. These are: (1) that the Recorder was wrong to find that clauses 2.1, 2.2 and 2.3 could be severed, and that to do so would not impermissibly change the character of the contract; (2) that she was wrong to find that the agreement was enforceable; (3) that she was wrong to treat clause 1 as a binding admission; and (4) that she was wrong to refuse to permit the admission to be withdrawn. The consequence of allowing the appeal would be that the case should be litigated and a costs and case management conference is sought.

I turn then to address these grounds and deal first with the blue pencil test. The appropriate test is common ground. Francotyp-Postalia v Whitehead [2011] EWHC 367 is a helpful case because Peter Smith J there drew the key cases together. He held at [18]:

“The applicable test was approved by the Court of Appeal in Beckett Investment Management Ltd & Ors v Glyn Hall & Ors [2007] EWCA Civ 613, where Kay LJ at [40] to [42] said this:

‘In a number of more recent first instance decisions, a threefold test has been applied. In the employment context, its origin is to be found in Sadler v Imperial Life Assurance Company of Canada Ltd [1988] IRLR 388. Mr P J Crawford QC, sitting as a Deputy Judge of the High Court, said at [19]:

‘A contract which contains an unenforceable provision nevertheless remains effective after the removal or severance of that provision if the following conditions are satisfied:

(1)

the unenforceable provision is capable of being removed without the necessity of adding to or modifying the wording of what remains.

(2)

the remaining terms continue to be supported by adequate consideration.

(3)

the removal of the unenforceable provision does not so change the character of the contract that it becomes 'not the sort of contract that the parties entered into at all’.’’”

I note also the Supreme Court decision of Tillman v Egon Zehnder Ltd [2019] UKSC 32, in particular paragraph [87] of the judgment of Lord Wilson JSC where he held in relation to the third criterion in an employment context:

“I suggest, with respect, that the criterion would better be expressed as being whether removal of the provision would not generate any major change in the overall effect of all the post-employment restraints in the contract.”

The Recorder referred to the relevant test at [42] of her judgment, and the parties agree that she set it out correctly. She referred to the Francotyp case at [43]. In my judgment, she directed herself correctly on the law. She concluded at [43] that it would be straightforward to strike through clauses 2.1, 2.2 and 2.3, leaving 2.4 and thereby saving the opening part of clause 2 and the remainder of the agreement without modification. She held that consideration would still be present on both sides.

On appeal, it is common ground that the first two limbs of the Sadler test are satisfied and the Recorder was correct in these respects. The challenge is to her conclusion on the third limb. She concluded at [44] that the contract shorn of subparagraphs 2.1, 2.2 and 2.3 would not impermissibly change the character of the contract.

For the Defendant, Mr Currie directed much of his fire at this point. He submitted that the character of the contract would be changed because, as drafted, it allowed the Defendant to discharge the debt via multiple fields of work at his election. Mr Currie fairly pointed out that Mr Lynch bargained for the ability to refer all four areas of work, and he had five years and four areas of work to look to. The effect of the blue pencil test would be to deprive him of that choice. He argued that Mr Lynch no longer had a wide elective choice, and so it was therefore wrong to say that the contract was still of the same character or the provision essentially had the same overall effect.

I note that the consequence of this submission would be that the unenforceable parts of the agreement could not be severed and the entire settlement would fall apart.

Attractively though the argument was put, I cannot accept it. In my judgment the severed agreement would remain a contract of compromise and the central provisions would remain. The debt was quantified, and it was to be paid off by the introduction of legal work. In default, after five years the sum outstanding would fall due as a contractual debt. The change effected by the use of the blue pencil test would be to remove criminal work from the scope of the work which could be introduced in order to reduce the debt.However, civil fraud work would remain.

I consider that the change effected by the blue pencil test would not be such as to change the character of the contract so that it became not the sort of contract that the parties entered into at all. It remained a contract of compromise which recognised an existing debt, and it was agreed that it could be paid off or reduced by the referral to the Claimant of legal work.

I consider therefore that the Recorder’s analysis on this point was correct.It follows that I consider that the Recorder was right to apply the blue pencil test, and Grounds (1) and (2) of the Grounds of Appeal are dismissed.

Before leaving this part of the case I should address a further point made by Mr Currie. He emphasised that Mr Bark-Jones admitted in his first witness statement that he never thought clauses 2, 3 and 4 of the Tomlin Order were enforceable by either party. As I understand the argument, Mr Currie submits that this amounted to a misrepresentation on the part of Mr Bark-Jones which induced Mr Lynch to enter the agreement and which would have meant that he could rescind the agreement.

The argument was not developed further, and it is not clear to me when or in what circumstances any such misrepresentation was said to have been made. Without such particulars, I cannot see how the argument gets off the ground, but on any view, it does not form part of the Grounds of Appeal, and so I do not address it further.

Mr Currie also suggested in argument that this meant there was not a true meeting of minds in the parties. I see some difficulties with that argument, since it is axiomatic that a contract must be construed objectively and without regard to the subjective understanding of the parties. It was suggested that the point might give rise to a defence of mistake, but again, the argument was not developed further, and again it does not form part of the Grounds of Appeal.

I turn to Ground (3). Mr Currie submitted that the learned Judge was wrong to find that clause 1 of the agreement was a binding admission as to the existence of a debt. He says that the admission needed to be clear and unequivocal, and it was not. Notwithstanding the careful argument that was deployed on this point, I confess that I found this Ground hard to understand given the express wording of clause 1 of the Tomlin Agreement, which is that:

“The Defendant owes to the Claimant the sum of £204,320.66”

This is then expressly identified in brackets as “the Debt”. The clause then continues:

“This sum is agreed by the parties as overpaid to the Defendant net of tax by the Claimant.”

Clause 5 also refers to “the Debt” and says that:

“If it has not been reduced after five years, it shall immediately fall due as a contractual debt.”

On the document, it is plain to my mind that the existence of a debt has been identified. By his signature on the agreement, the Defendant admitted the existence of that debt. I see nothing that is not clear and unequivocal, and I therefore dismiss Ground (3).

Ground 4 is that the Recorder was wrong not to permit the admission of the debt to be withdrawn. It is this that underpinned the Defendant’s opposition to the Claimant’s summary judgment application. For the Claimant it is an alternative to the case on severance since, even if the Tomlin Order is not severed, five years have passed and, by clause 5, the debt has fallen due.

The Recorder noted at [55] of her judgment that there was no formal application to withdraw the admission, but the Claimant was prepared to treat the Defendant’s response to a summary judgment application as amounting to a CPR 14.5 application to withdraw the admission. She then went through the relevant subparagraphs under CPR 14.5. These are:

“In deciding whether to give permission for an admission to be withdrawn, the court shall consider all the circumstances of the case, including:

(a)

the grounds for seeking to withdraw the admission;

(b)

whether there is new evidence that was not available when the admission was made;

(c)

the conduct of the parties;

(d)

any prejudice to any person if the admission is withdrawn or not permitted to be withdrawn;

(e)

what stage the proceedings have reached; in particular, whether a date or period has been fixed for the trial;

(f)

the prospects of success of the claim or of the part of it to which the admission relates; and

(g)

the interests of the administration of justice.”

The Recorder then said this at [56] to [58] of her judgment:

“56.

As to (a) the grounds for seeking to withdraw the admission, there are none clearly stated. The Defendant seeks to re-open the underlying litigation, but says nothing more now than that he entered the admission at a time of great stress. As to (b), whether there is new evidence that was not available when the admission was made, there is not. As to (c), the conduct of the parties, the history set out in full in my judgment above demonstrates in my assessment a tactic of delay, in a pattern of avoidance of the reality of the situation. To date the Defendant has avoided the striking out of his defence to an original claim for in excess of £415,000 by entering the Agreement admitting a debt less than half of the claimed sum, in the total of £204,322.66. He has then not paid a penny towards it for in excess of 7 years. He has however by the entry of the Tomlin avoided being liable for the 5 years’ worth of interest on the admitted Debt or any balance of that debt. The Agreement afforded him the opportunity, at his election, to discharge the debt by the referral of fee generating work into the Claimant’s firm, rather than by actual payment of any funds from himself. Having failed to refer in any fee generating work, he has then continued to avoid payment of the debt for in excess a further 2 years from the end of the Agreement period in December 2022, to date. He now seeks to continue to avoid the Debt by the argument that the Agreement contained in the Schedule to the Tomlin is void in totality, or that the legal terms cannot be severed or saved, such that no money is due and the original claim has to be re-opened and litigated, thereby postponing the hearing from December 2024 to the instant hearing and necessitating the issue of the fall-back summary judgment application.

57.

Re factor (d), any prejudice to any person if the admission is withdrawn or not permitted to be withdrawn, it is obvious that the Claimant would be prejudiced by yet further deferral of its ability to recover the sums due. I do not find that the Defendant would suffer legitimate prejudice – I have seen nothing by way of evidence to suggest that he has any defence to the Debt. This is in part because of factor (e), what stage the proceedings have reached, it being the case that the Defendant had not provided disclosure, had prepared no witness evidence, and had not answered the Part 18 request in relation to his Defence. Had he genuinely wished to seek to pursue his Defence to the litigation or to object to the compromise, one would expect that to have been done sooner than 4 December 2024. The matter was not in any way ready for trial. There is no basis for me to see that the Defendant had any real prospect of defending.

58.

The Debt has accrued. It is payable on demand. It has been demanded. The Defendant has no defence to the application and there is no reason why the claim should be tried. On the contrary it would be entirely contrary to the interests of the administration of justice and of the overriding objective if at this stage, in excess of 7 years after the matter was compromised and the Debt agreed and admitted, the Defendant were able now to re-activate a Defence which had not been proceeded even as far as compliance with an Unless Order to answer a Part 18 Request.”

Mr Currie relied upon the decision of Coulson J, as he then was, in The Dorchester Group Ltd v Kier Construction Ltd [2015] EWHC 3051 (TCC), where one party to a building dispute (Kier) made an open offer to the other (Dorchester). The offer included a “package” of terms, one of which was in essence an acceptance that Dorchester was entitled to undeclared discounts obtained from sub-contractors: see [5].

Dorchester sought judgment on this on the basis that it amounted to an admission. Coulson J rejected that argument. At [10] of his judgment he held:

“…the letter of 21 September 2015 was an open offer. It contained a package of terms which Dorchester could either accept or reject. It would be contrary to the whole basis of an offer if Dorchester were permitted to accept what they say was a part of it (by claiming that it was an admission), whilst rejecting other elements of the same package”

Mr Currie relied in particular on [10] where Coulson J referred to the package of terms which could be rejected or accepted in their entirety. But that seems to me to be a long way from the present case, which, as I have found, is a binding compromise and one which contained an admission of a debt.

The issue, therefore, is whether the admission can be withdrawn. In my judgment, having correctly directed herself as to the law, the Recorder then weighed the checklist of factors set out under CPR 14.5. I remind myself that when looking at the Recorder’s approach to rule 14.5, as an appellate court, I am exercising a review function.

Mr Currie raises the following points in relation to the Recorder’s approach under 14.5. Under (a), she referred to the Defendant being under stress. He says that the point that was relied upon was not stress. He submits that she failed to take account of the underlying point which was that it was because the entire agreement was not enforceable that the package had fallen away.

I accept that she did not refer expressly to this point but, since I have concluded in agreement with the Recorder that the agreement was enforceable and included a binding acknowledgment of a debt, I do not consider that this factor would weigh heavily in favour of allowing the Defendant to resile from the admission.

Under (b) and new evidence, Mr Currie submits that the Recorder overlooked the witness statement in which Mr Lynch said that the agreement was not enforceable and he never regarded it as having been enforceable. I am confident that that was not overlooked by the Recorder, as she referred to it expressly at [32] of her judgment.

Under (c) and the conduct of the parties, the Recorder referred to the delay. Mr Currie says that it is unfair and improper to criticise the Defendant on account of delay when that was taken account of under two subheadings. I disagree, and I consider that she was entitled to take account of it in the way that she did. This is, after all, a very stale case.

Under (d) and the question of prejudice, Mr Currie submitted that it would be obvious that the Claimant would be prejudiced if the Defendant was permitted to resile, but the prejudice to the Defendant was given no weight. It would, in his submission, mean that the Defendant had no defence to the debt. I do not accept this. The Defendant deployed no evidence to suggest that the underlying debt was not owed. Being held to a debt which is owing cannot be regarded as prejudice to the debtor. As the Recorder said, there was no basis for her to see that the Defendant had any real prospect of defending the claim.

Under (e), which is the stage the proceedings have reached, Mr Currie says that the Recorder relied upon delay and punished the Defendant twice under both (e) and (c) in relation to the delay. In my judgment, it is material to bring into account at (e) the fact that in this case the Defendant had done little to progress the matter. I would add that, were permission to be given to withdraw the admission, the parties would be back to square one. The facts date from 2016 and 2017, and proceedings were issued ten years ago. It is an exceedingly stale case, and this is a matter that can properly be brought into account when deciding whether the admission should be withdrawn under CPR 14.5.

At [47] the Recorder correctly directed herself as to what needs to be established on a summary judgment application. Standing back and looking at the way that she approached CPR 14.5, I cannot see that the Recorder impermissibly took into account an irrelevant factor or overlooked relevant factors.

I can see no basis on which this court, exercising a review function, can properly interfere with the Recorder’s weighing of those factors. I consider that the conclusion she came to was one that was properly open to her.

I accordingly dismiss the appeal under Ground 4.

It follows, therefore, that the appeal is dismissed.