Can a dual passport holder leave the country on his British passport and re-enter on his Thai passport at a land border crossing or does he need to fly out and then back in.

not at land crossings. will need to fly, Hong Kong and Malaysia require no visa

Normally the best way is to fly out and back to do a passport swap.

There have been reports of doing a passport swap to a Thai passport for entry but it will take some talking to get it done.

The problem is that Thai immigration will want to see entry and departure stamps for the other country in the passport you are using for entry and the other country wants to see a Thai departure stamp in the passport when trying to enter there.

A Thai national cannot be refused entry into Thailand, so should be possible to do at a land border (if you inquire politely before you do it). But suspect it will means problems, refusels and be told impossible..

Better to re-enter by air.

Thanks guys I'll let my friend know