A south London skip hire business has won £8,116,023.37 plus interest from Network Rail in compensation for its premises – almost £5m more than Network Rail argued it should pay.
The ruling analyses, among other things, the difficultly of assessing the compulsory purchase compensation due to businesses operating without debt.
Welcocks Skips Limited has been a waste transfer station, skip hire business and recycling station at Bolina Road in Bermondsey since 1990, operating on land leased from Network Rail.
However, in 2012 Network Rail took possessing of the premises as part of the Thameslink infrastructure project.
Welcocks, which had long-term contracts worth more than 1m pounds a year from clients such as Veolia Environmental Services, but made the majority of its money from short-term jobs, fell into dispute with Network Rail over the amount of compensation that should be due to them, and the case went to the Lands Chamber of the Upper Tribunal in January.
At the tribunal, Welcocks argued that it was due more than £10m, while Network Rail argued it was due £3.8m.
Six months after the hearing, the tribunal has published its judgment awarding Welcocks just over £8m.
In a complicated ruling of almost 50 pages the tribunal weighs, and then dismisses Welcocks’s claim for compensation for lost business prior to the loss of the property caused by rumours of the compulsory purchase.
However, the tribunal disagreed with both sides overall valuation of the business, settling with a figure just below Welcocks’s, but much higher than Network Rail.
The ruling said that the complicating factor in the valuation was Welcocks’s lack of debt, which complicated the calculation of the profit-before-tax multiplier that should be used.
Welcocks Skips Limited v Network Rail Infrastructure Limited
Before: Her Honour Judge Alice Robinson and A J Trott FRICS
Lands Chamber of the Upper Tribunal
17 July 2019