Blimey, you're both right! He's right that the default language assigned to a document in any of the Apple iWorks program is whatever you specified as your system language (you can peek to see what's set as your default spelling language in System Preferences --> Language and Text --> Text --> Spelling). But you're also right that it is quite possible to change the default language for a specific document in iWorks to be whatever you'd prefer, you're not stuck with whatever language it picked up as the default.

I'll demonstrate in Pages, the word processing app included with Apple's iWorks program, but really, this will work in any of the apps in the suite.

I've created a simple more-or-less coherent sentence that demonstrates a number of British spellings of words. Is the British spelling correct? I won't get into that debate here because there really isn't a satisfying answer, is there? :-)

As you can see, Apple Pages has flagged the British spellings as misspelled:

To fix this, open up the document inspector if it's not already open, then go to the text pane (the "T"):

As I have highlighted here, you'll want to click on "More" along the bar to get to the area where the spelling language is defined:

Change that to British English (though check out how many options there are too!):

And... nothing changes. The words are still flagged as misspelled.

That's because iWorks is pretty slick with languages: you can have a paragraph of German and flag it as the only portion of the document that should be checked with the German language spelling checker, even as the rest of the document is checked against American English spelling. Cool, but what's the solution here?

The solution is easy if you think about it just a bit: use Edit --> Select All to select everything in the document, then change the language to British English.

Now, suddenly, all is well with the spellings:

As far as I can tell, there's no way to change the underlying language of a document, but this should be a simple workaround that will help harmonise, uh, harmonize communications between you and your British colleague!