Your gas engineer is correct in that it should have a flue liner attached and so he is correct not to work on it, firstly he couldnt do a correct flue flow test, nor could he guarantee the safety of the unit. At the very least he should have switched it off as "at risk", although i suspect it could also be classified as immediately dangerous too. I would be inclined to contact the previous owner to find the last gas engineer who serviced it and report him/her to gas safe register. You can aslo contact gas safe register and ask their advice.
chris m, August 2011