DVLA don't recommend buying a car without a V5 - if there's no problem with the car then let them test it. Should've HPI'd it before he bought it really, but then people don't tend to bother when buying off mates (especially daft if you ask me, as at least with a dealer you have some come back)
Car is probably a certain category write off hence requiring an inspection.....or maybe it shouldn't have gone back on the road hence no V5?