[2025] UKUT 274 (LC)

Mr Quyoom started working in his family’s licensed taxi and private hire business when he left school in 1987 and branched out into the vehicle dismantling industry in 1992. For almost 20 years he operated as a sole trader, initially supplying parts to local taxi drivers but gradually expanding to trade in all types of vehicle over a much wider geographical area. In 2011 JAP Euro North East Ltd was incorporated and the business was conducted through it. Mrs Quyoom was the sole director of the company, although she was not active in the business which was run by Mr Quyoom alone. The only business records available to support the valuation exercise date from the formation of the company.

Between 1992 and about 2001 Mr Quyoom operated the business only from the Site. He purchased additional premises on North Street, a few hundred yards from the Site, in about 2001, and then operated a single business from the two locations until the Site was taken in 2018.

The Site was the main vehicle salvage and breakers yard for the business. It was well located in what was originally an industrial area close to the River Tees. It had previously been used as a brickworks and it had an office and a workshop, which Mr Quyoom equipped with a vehicle-lift, compressor, tyre machine and other necessary equipment. He also installed a drainage system to enable vehicles to be depolluted on site and racking on which vehicles could be stored. The Site was licensed by the Environment Agency with a storage capacity of 1,000 vehicles, 50 tonnes of residual waste and 10 tonnes of hazardous waste. Mr Quyoom himself was the licensed operator.

The North Street premises, acquired in 2001, comprised a warehouse with a concrete floor and a yard with capacity for approximately 500-600 vehicles (although Mr Quyoom said there were never as many as that on site). North Street was used solely for vehicle storage, including of higher value vehicles which were stored in the warehouse until they were moved to the Site to be dismantled.

It was generally not Mr Quyoom’s practice to dismantle vehicles as soon as he acquired them and they were kept on racks or stacked around the Site after depolluting until a customer arrived who wanted a particular part. The business also had a stock of parts which had either been taken from vehicles or acquired separately.

Mr Quyoom typically purchased ELVs from specialist auctions operated by insurance companies, which were accessible only to licensed vehicle breakers. At first he acquired vehicles which were popular with taxi firms, usually Japanese models but later European brands, but eventually he branched out into vehicles of all types. He relied on his own experience and judgment of the likely demand for parts, on the basis that the individual parts which could be stripped from a vehicle would eventually realise a greater price than he had paid for it as a whole. He told us that he would look for ELVs with low mileage and rear end damage, for which he might pay £2,000 at auction in the expectation that the engine and gearbox alone might be sold on for £4,000 or £5,000. Over a period of ten years or more the whole vehicle might eventually yield undamaged parts which could be sold for up to £15,000 depending on the model, its condition and the rarity of the components.

Before the Compulsory Purchase Order came to be made in 2014, the business had acquired a nationwide customer base and Mr Quyoom travelled regularly to auctions all over the country. He had also begun to sell online on a small scale and that side of the business became more important as the Middlehaven regeneration scheme got under way around the Site. The Council began to acquire land in about 2012 and ground works commenced in about 2015. As more sites in the area became vacant, buildings were cleared, familiar landmarks disappeared, temporary road closures were occasionally required and the walk-in trade declined.

Vandalism and theft also increased in the locality. When the Council took possession of the Site in March 2018 it was still full of vehicles. There followed a lengthy period during when the parties failed to agree how, and by whom, the Site could best be cleared but this impasse was brought to an end after eighteen months when on 30 September 2019 a fire destroyed all of the stock, equipment and racking which remained on the Site. Whether the fire was started accidentally, by thieves using cutting equipment to remove catalytic converters, as Mr Quyoom believes, or deliberately, as the fire service incident report suggested, is not a matter we have been asked to consider.