[2025] UKUT 274 (LC)

Fecha: 19-Ago-2025

The claim

The claim

14.

The claimants’ claim for the cessation of their business is put at £5,074,085. That figure is the aggregate of three sums.

(i)

£3,434,085, which is said to be the profit which the business would have realised from the stock in its possession at the valuation date if it had continued trading.

(ii)

A further £1,400,000 representing “the future value of the business” which is an estimate of profits which it is said the business would have achieved had it continued trading, acquiring and selling new stock, from the valuation date until an assumed date of retirement for Mr Quyoom ten years later, together with a sum representing the value of the business on his retirement on the assumption that he could then sell it as a going concern.

(iii)

A sum originally described as “losses derived from unrealised business originated from intangible assets of the Company” and put at a sum of £350,000 but later renamed “goodwill” and reduced to a figure of £240,000.

15.

Mr Pearson, the Council’s forensic accountancy expert, valued the claimants’ business at not more than £377,000. This figure was Mr Pearson’s assessment of the value of the business on a “market” or capitalised earnings basis, calculated by applying a multiple to the estimated maintainable earnings (or EBITDA) in 2013 (which was the best year for which adequate financial information was available and also predated any adverse effect on the business of the regeneration scheme for which the Site was taken). However, if the value of the claimants’ stock was greater than the value of the business as a whole, calculated in this way, it was suggested by Mr Pearson that a sum representing the value of the stock would be an appropriate alternative basis of compensation.

16.

Mr Parton, the claimants’ forensic accountancy expert, did not consider that Mr Pearson’s methodology was appropriate for the required valuation, as he understood it, but he helpfully provided what he described as an indicative enterprise valuation on the same capitalised earnings basis to assist the Tribunal if we were attracted to that approach. Using the earnings of the business in 2013 as the basis of assessment, as Mr Pearson had done, Mr Parton came to a figure of £628,000 for the value of the business. If, instead, earnings over the three-year period before the cessation of the business were used, the value would be £158,000 (but it is the claimants’ case that the business was adversely affected by the scheme in those years).

17.

The claimants also included a claim for £25,000 in respect of “management time”, referable to an estimated 500 hours spent by Mr Quyoom as a result of the taking of the Site and the cessation of the business at an hourly rate of £50.

18.

The Council had offered £10,000 in respect of management time, but this offer was withdrawn by Mr Fraser KC in closing submissions on the grounds that no evidence had been adduced by the claimants in support of this head of compensation.