Have a look back through the archives for further debate on this.
You are right that the JAR makes no mention of any requirement for the instructor to make a decision on the quality of the flying. All it asks for is an hour's flight with an instructor. The CAA, however, has decided to put out an AIC suggesting what the flight should include, and saying that if the instructor is not happy he/she should not sign the logbook. This is turning the instructor into an examiner with neither the training, licensing, or remuneration commensurate with that. Dodgy, in my opinion.
Having said that, we would all hope that your flying club colleague would be happy to take the construcive criticism from an instructor and, in the interests perhaps of looking after their own skin, take any further training considered necessary to make the instructor happy.
BEagle mentions the other possibility which is to go straight into a full Prof check with an examiner, but that costs money as well and if he fails that then further training I would suggest is mandatory.
The problem comes for the guy who has to sign the CofT. I have yet to see any clear guidance on whether he is allowed to do so without a signature from an instructor in the logbook. JAR seems to suggest that it is not required, but the CAA has stuck its oar in again. I suppose it would be difficult for a CFI to agree to sign a CofT if one of his instructors wasn't happy.
Irrespective of the legalities, common sense SHOULD suggest to your colleague that the fact that another pilot is not happy means that perhaps a little help is required. It should not be a pride thing. Safety should take precedence.
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"Take-off is optional, Landing is mandatory"