FUNCTIONINGS OF LAND Analysing Compulsory Acquisition Cases from Scotland Jyoti Rao Functionings of Land Jyoti Rao Functionings of Land Analysing Compulsory Acquisition Cases from Scotland Jyoti Rao University of Melbourne Melbourne, VIC, Australia ISBN 978-981-13-1440-7    ISBN 978-981-13-1441-4 (eBook) https://doi.org/10.1007/978-981-13-1441-4 Library of Congress Control Number: 2018949300 © The Editor(s) (if applicable) and The Author(s) 2018 This work is subject to copyright All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, 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Preface This book is inspired by the “unjust” approach to social welfare as demonstrated through “unfair” compensation models adopted in many cases of compulsory acquisition of land for public infrastructure projects across the globe While the momentum of social welfare maximization is appreciated, there is need to relook at the inequalities in the distribution of benefits and burdens among different members of the society Compulsory acquisition of private land for public projects is a classic example of unequal distribution of burdens, which are concentrated in the hands of those landowners whose share of contribution to the project, in the form of land, is probably the largest This book initiates the debate on consideration of functionings of each affected landowner in the compensation model so that all subjectively valuable functionings of the landowner can be satisfactorily recreated or replaced These discussions pave way for fairer compensation mechanism, through which is ensured just distribution of benefits and burdens arising from any public project Melbourne, VIC, Australia Jyoti Rao v Contents 1 Introduction  1 2 Theoretical Framework  7 3 Case Studies from Scotland 39 4 Conclusion 99 vii List of Figures Fig 1.1 Fig 2.1 Step-by-step method of qualitative content analysis used in this research (Source: Rao (2017), p. 313) Positioning “capability and functionings” in the theoretical framework17 ix List of Tables Table 3.1 Table 3.2 Table 3.3 Table 4.1 Table 4.2 Timeline of events for the case of David Strang Steel and Richard Strang Steel v Scottish Ministers, 2014 49 List of functionings identified under each case study (1997– 2016)90 Relative occurrence of discussions of functionings at the Lands Tribunal for Scotland 96 Loss of financial gains from expected and planned development104 Cases of reduction in market value of the subject property due to the negative impact of public works 106 xi CHAPTER Introduction Abstract  The introductory chapter initiates the discussion on Sen’s capability theory and its application in the re-examination of value of land to its owner in the context of “functionings.” The chapter states the scope of the book, which is limited to understanding the functionings of land that have been identified as being valuable to landowners in Scotland and are often uncompensated in the process of compulsory acquisition This is performed through qualitative content analysis (QCA) of 19 relevant case reports from the Lands Tribunal for Scotland A short description on the method of QCA is presented in this chapter Keywords  Capability • Functionings • Property rights • Compulsory purchase • Compensation • Market value • Compulsory acquisition Functionings and capabilities generated from land, by their owners and the challenge in satisfactorily recreating these through the compensation paid in the case of compulsory acquisition of private land, are the focus of this book These discussions initiate a new debate on the insufficiency of existing approaches to compensation that are ignorant of the losses of “capabilities” and “functionings.” The relationship between land, ownership and well-being of an individual is explained through the identification of various “functionings” associated with the ownership of land in the context of Scotland © The Author(s) 2018 J Rao, Functionings of Land, https://doi.org/10.1007/978-981-13-1441-4_1 2   J RAO Re-examination of theories of justice and the approaches to equality by economist-philosopher Amartya Sen reveals the insufficiency of earlier theories in addressing inequalities in the society While the focus of most theories of distributive justice is concentrated in “just” allocation of scarce resources, Sen (1979) argues that this approach does not eradicate the inequality of human “capabilities” which results in unequal utility Sen strongly argues for equalization of capability and functionings as a holistic approach to equality Sen’s capability argument provides strong theoretical reasoning for considering individualistically valuable functionings (or usefulness) generated from land by the landowners, who are unequal in their capabilities Land permits generation of multiple functions which include those necessary for a good life (howsoever it may be defined) In the context of free market operation where a willing seller exchanges land with a willing buyer, the market value1 of land shall satisfactorily replace or reconstruct all valuable functionings of the original landowner, who will otherwise not sell the land However, in the process of compulsory acquisition of private land (for public purposes), particularly in cases when the affected landowner is unwilling to sell, the subjective value attached to the functionings from land may be higher than its market value, and it is not always possible to reconstruct these functionings from its (monetary) market value While market value of land is an essential component of losses borne by the landowner, it does not fully encapsulate all valuable functionings which are attached to land There is need to re-examine losses of affected landowners through the application of Sen’s capability theory, and pave way for “fairer” compensation mechanism for the compulsory acquisition of land The scope of this book is limited to understanding the functionings of land that have been identified as being valuable to landowners in Scotland and are often uncompensated in the process of compulsory acquisition This is performed through qualitative content analysis (QCA) of 19 relevant case reports from the Lands Tribunal for Scotland As the Lands Tribunal for Scotland is the final arbiter on compulsory purchase compensation claims, decisions from this body are considered the best available evidence of interpretation of the existing legislation It is acknowledged  Market value is “the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion” (IVSC, 2018)  CONCLUSION   101 reason; affiliation; other species; play; and control over one’s ­environment (political and material) (see Nussbaum (2000) for more details) While discussing central capabilities, Nussbaum (2000) acknowledges the importance of property as a tool of human functionings and writes that “Land is frequently a particularly valuable source of self-definition, bargaining power, and economic sustenance …” (p. 80) Further emphasis on land capabilities is put by (Claassen, 2015), who goes to the extent of suggesting inclusion of capability to hold property in the list of central capabilities proposed by Nussbaum (2000) Appreciating Nussbaum’s (2000) and Claassen’s (2015) discussion on land as an important resource in capability building, Rao (2018) identifies nine “fundamental functionings” which are (i) secure means to basic ends, (ii) self-identity, (iii) social capital, (iv) social equity, (v) political empowerment, (vi) power to take decisions on land matters, (vii) family’s well-being, (viii) personal comfort and convenience and (ix) psychological well-being In the context of compulsory acquisition, Rao (2018) explains that “fundamental functionings” are generalizable across all landowners and establish the minimal limit for compensation Setting up the minimal threshold of fundamental functionings helps overcoming the challenge of landowner’s psychological adaptation to circumstances In addition to these “fundamental functionings,” there are other valuable functionings subjective to each affected landowner “Fair” compensation is defined by Rao (2018) as the satisfactory reconstruction of all fundamental functionings and subjectively valuable functionings of the landowner In the light of Sen’s capability theory, the principle of equivalence would mean equalizing the capabilities and functionings of each affected landowner, before and after compulsory acquisition so that he is put back in the same “condition” as she was before acquisition Application of Sen’s theory to derive fairer compensation demands in-depth inquiry into fundamental functionings at the global level as well as subjective functionings at the individual level While the task of identification of individualistically valuable functionings is challenging, it is much needed for derivation of fairer compensation and for overcoming the problem of unequal distribution of “burdens” of public projects (which are asymmetrically concentrated to those who lose land for public projects) The resistance from the disadvantaged groups of landowners has significant negative impacts on public projects to the extent of complete termination, as observed in the case of East West Link road project in Australia (refer to Residents Against the Tunnel, 2015 for more details) There is a growing realization of the enormous 102   J RAO costs (both economic and social) in overcoming resistances offered by the landowners to the compulsory purchase processes and consequential negative externalities to the public projects It is doubted that the cost (both economic and social) of conflict resolution, including legal disputes undertaken by aggrieved landowners, may at times be greater than the cost of individual negotiation with each affected party This topic is underresearched and demands more attention This research acknowledges that there are challenges in adopting individualistic approach to compensation, but these not undermine the necessity of “fairness” of treatment to the affected landowners through “fairer” compensation With the help of discussions presented by affected landowners to the Lands Tribunal for Scotland, this book identifies 15 individualistically valuable functionings that are strongly debated by the landowners, as compensable losses which remain uncompensated under the existing model of compensation in Scotland In addition to these, there must be many more functionings which are not captured under analysed case reports, and yet are valuable There is need for the expansion of this inquiry to include landowners who are unable to reach out to the Lands Tribunal, which is an expensive process These functionings are generalizable to other jurisdictions which share commonalities of social, political, legal, economic and cultural set-ups There is good scope for the expansion of this research into different communities in different regions and observation of the nature of functionings associated with land to better understand the social, political, economic and cultural functions of land, in addition to its financial functions Returning to the discussions on Scotland, the following section discusses 15 subjectively valuable functionings in more detail 4.1   Functioning of Land The various losses that emerged from the discussions in the case reports cover a wide range of functionings associated with land and property Four broad headings (A to D) and 15 sub-categories of functionings were obtained Each of these functionings is discussed in detail below 4.1.1   Financial Functionings of the Landowner Market value of land should give true account of all existing financial functionings arising from it, or in simple terms all financially measurable benefits  CONCLUSION   103 from land in the present time Hampering these financial functionings (4, and 6) would mean a direct negative impact on the market value of the property Therefore, these functionings are quantifiable in terms of detriment to market value of land However, there are many financial functionings which are dynamic in nature and depend upon the performance of property market in the future (1, and 3) Landowners who are hopeful of benefiting from these functionings in the future hold their property long enough to witness the impact However, in the case of compulsory acquisition, this opportunity to hold property is lost, and this leads to the loss of many futuristic financial functionings, some of which are discussed in this section 4.1.1.1 F  inancial Gains from Expected and Planned Development in the Near Future This functioning emphasizes the importance of losses linked to the curtailment of development activities, “expected” and “planned,” on the subject land Potential for future development was the most discussed functioning at the Lands Tribunal as landowners expect to receive future financial benefits from these developments In some cases, landowners had already initiated planning process for development permit In other cases, the execution of project had also been undertaken During the representation at the Lands Tribunal, the emphasis of landowners’ appeal was that they had already planned the development activity before the compulsory purchase order was issued and were aware of the type (or nature) of development activity on their land The landowners could support their claim with formal evidences validating their attempts towards developing the land In reference to proving the loss of development potential, the evidence produced by the landowners often included formal planning permission, prior to the CPO, or Certificates of Appropriate Alternative Developments (CAADs), after the CPO Table 4.1 below summarizes this type of losses This also covers the loss of developability of the remaining land due to severance, for example, in the case of David Strang Steel and Richard Strang Steel v Scottish Ministers, (2014) and Glenmore v Transco (2003) The claim was for injurious affection to the remaining land parcels that were being landlocked due to the acquisition of a part of the land holding 104   J RAO Table 4.1  Loss of financial gains from expected and planned development No Nature of loss i ii iii iv v vi vii viii ix Case Loss of two additional wind turbines that were planned by the landowner Auquhirie Land Company Limited v Scottish Hydro Electric Transmission plc (2016) Sterilization of the land for the establishment of two Marjory Gordon, Hugh additional wind turbines and consequential Gordon and Executors of reduction in the value of land Hugh Gordon v National Grid Gas plc (2016) Loss of development potential of land which was in Christies of Scotland Limited use as a nursery and was considered developable as a (Applicant) v Scottish holiday park Ministers (Respondents) (2015) Loss of development potential of land for a David Strang Steel and supermarket Richard Strang Steel v Scottish Ministers (2014) Division of a large, contiguous land parcel into two Emslie v Scottish Ministers parts and the loss of agricultural efficiency and (2014) intensity and consequential reduction in the value of the remaining land Loss of development potential for a golf course Danzan Trust & The Dundas Estate v Edinburgh City Council (2007) Planning permission for a residential development Julien v City of Edinburgh was received by the original owner However, the Council (2006) same was not utilized when the CPO was received Therefore, subject land had potential for residential development Sterilization of land for residential development as a G S Brown Construction result of a wayleave which was granted for an Limited v S P Transmission electricity transmission line Limited (2003) The landowner (Freshbright Cemeteries Limited) Freshbright Cemeteries purchased the cemetery land with intentions to Limited v The City of carry out reinterment of the cemetery and to Edinburgh Council (2001) redevelop the site into a memorial garden and housing 4.1.1.2 F  uture Benefits Linked with Unseen Development Potential of the Land Parcel The unseen development potential that the land offers to the landowners allows them to benefit from market mechanism in the future, but the nature and extent of such development activity is unknown in present  CONCLUSION   105 times Also, the remoteness in timing of the development further extenuates the uncertainty In the case of Young v City of Edinburgh Council (2001), the landowner argued for the unseen development potential of his land, which was acknowledged by the Lands Tribunal but not without discounting the benefits for the risk in obtaining requisite planning permission which in effect nullified any value gain As explained under Chap 3, a CAAD details future uses of land even though they are probabilistic; however, the onus to propose the classes of developments lies with the applicant For example, in the case of Marjory Gordon, Hugh Gordon and Executors of Hugh Gordon v National Grid Gas plc (2016); Christies of Scotland Limited (Applicant) v Scottish Ministers (Respondents) (2015); David Strang Steel and Richard Strang Steel v Scottish Ministers (2014); and Danzan Trust & The Dundas Estate v Edinburgh City Council (2007), the landowners applied for a CAAD, and the certificate mentioned uses which otherwise were unseen by the landowners It may, however, be emphasized that the CAAD is not conclusive, and it is the responsibility of the landowner to prove that the land has the potential for specified classes of development 4.1.1.3 B  enefits from Expected Improvements in the Market Condition in the Near Future There are also goods and services whose production is land intensive Expected improvement in demand for these goods and services, for which the production is dependent upon the availability of land, should in turn build demand for land In the case of Auquhirie Land Company Limited v Scottish Hydro Electric Transmission plc and Marjory Gordon, Hugh Gordon and Executors of Hugh Gordon v National Grid Gas plc (2016), it was argued that the demand for renewable energy from wind turbines was likely to increase in the future, which could have positive impact on land values and desire to benefit from changed market conditions In another case, Glenmore v Transco (2003), the landowner expected growth in demand for residential units in the area More recently, in the case of Christies of Scotland Limited (Applicant) v Scottish Ministers (Respondents) (2015), the landowners argued that the demand for recreational property, including caravan parks, was increasing despite the economic recession The demand for a supermarket in the area was clearly established in the case of David Strang Steel and Richard Strang Steel v Scottish Ministers (2014) In the case of Danzan Trust & The Dundas Estate v Edinburgh City Council (2007), the landowner expected to benefit from an improved demand for golf courses in the future 106   J RAO 4.1.1.4 M  arket Value of the Property and Consequential Reduction Due to Public Works Land is a real asset that is a good hedge against inflation Scarcity of land ensures that its value continues to rise as demand increases over time However, some public works may generate negative externalities for land causing its values to depreciate Table 4.2 summarizes some of the reasons for the reduction in the property value that were observed during case discussions 4.1.1.5 Income (Existing and Expected) from Land and Its Produce Income generation is a fundamental function of land, and the landowners who use their lands for income generation could modify or intensify the use of land to enhance its income generation potential In reference to Scotland, this functioning is specially emphasized in cases where the landowners were losing incomes generated from land as well as opportunity to intensify its use This includes cases of acquisition of properties that were being used for the business of a nursery and garden centre (Christies of Scotland Limited (Applicant) v Scottish Ministers (Respondents), 2015); agricultural income generation (Emslie v Scottish Ministers, 2014); industrial activities (McEwan v East Dunbartonshire Council, 2004); brickworks Table 4.2  Cases of reduction in market value of the subject property due to the negative impact of public works No Nature of negative impact due to public works Case i Marjory Gordon, Hugh Gordon and Executors of Hugh Gordon v National Grid Gas plc (2016) Aberdeen City Council v Glen Morrison and another (2014) ii iii iv v vi “Sterilization” of a portion of land that was otherwise considered useful for installation of wind turbines “Material detriment” was established based on the extent of loss of amenity (of a portion of the garden) Sterilization of land for residential development due to the grant of wayleave for electricity transmission lines Blight of land for the development of housing units Physical damages to the existing industrial unit Physical factors (e.g noise) caused by the use of the new by-pass depreciated the value of residential property G S Brown Construction Limited v S P Transmission Limited (2003) Glenmore v Transco (2003) Fitzpatrick v The Coal Authority (2001) Dobbie v Fife Council (1998)  CONCLUSION   107 and mineral extraction (SBC Properties Limited v Midlothian Council, 2002); cemetery (Freshbright Cemeteries Limited v The City of Edinburgh Council, 2001); and joinery business operation (Bussell and Others v City of Edinburgh Council, 1998) 4.1.1.6 A  gricultural Efficiency That Results from Ownership of Large Land Holdings Agricultural efficiency of land is certainly improved with larger, contiguous land holdings since the productivity in the use of machinery and tools is enhanced with size of land Small and non-contiguous land holdings increase the cost as machinery and tools cannot be applied efficiently The case of Emslie v Scottish Ministers (2014) presents an interesting discussion on the reduction of argucultural efficiency of land after it was bifurcated by a road 4.1.2  Personal Comfort Offered to the Landowner, Both Physical and Psychological At the time of selecting property, potential owners pay a lot of attention to the locational characteristics of the property, changing of which may cause significant negative influence on their personal comfort Acquittance with the property and its location is developed after many years of possession and is crucial for the well-being of the occupier Three different forms of comfort are discussed in this section 4.1.2.1 P  ersonal Comfort from the Physical Environment In and Around the Property Owner-occupiers are usually appreciative of the physical environment in and around their property, and this forms an important factor in the enjoyment of their property Changes in the physical elements of the property may cause inconvenience to the occupiers For example, in the case of Dobbie v Fife Council (1998), as a consequence of a new road, the owneroccupiers found their personal comfort was compromised due to (i) increase in the noise level from the traffic on the new by-pass road, (ii) the loss of the views of the open fields and (iii) the loss of their hobby of pigeon keeping The following are some other examples of changes in the physical environment that negatively impacted the well-being of the owner-occupier: reduction in the size of the garden and increase in traffic noise on the front road (Aberdeen City Council v Glen Morrison and 108   J RAO another, 2014); physical damage caused to the industrial unit during execution of public works (McEwan v East Dunbartonshire Council, 2004); physical damages caused to a dwelling unit as a consequence of mining subsidence (Fitzpatrick v The Coal Authority, 2001); increase in traffic noise level (Robertson, King, McKinlay & Croll v Perth & Kinross District Council, 2004) 4.1.2.2 Certainty of Stable Business Operations at a Given Location The physical location of the property is at times crucial for a stable business operation In the case of compulsory acquisition of commercial properties, the businesses are forced to relocate Alongside monetary losses to the business, there is often the loss of certainty of stabilizing the business operations given that the advantages of the earlier location, including old clientele, are usually lost after the relocation, as argued in the case of Bussell and Others v City of Edinburgh Council (1998) In addition to that, there is a lack of certainty of finding a suitable place for re-establishment of the business that will fit into the budget as well as be an equally good replacement of the earlier location A good example is the case of Callum Stewart Macfarlane v North Lanarkshire Council (2011), in which the owner argued over the inadequacy of compensation to find a suitable replacement of garage lock-ups for rental or ownership purposes, in a location where he could have possibly continued with his business 4.1.2.3 Experience and Expertise in a Specific Type of Economic Activity Comfort in performing a specific type of economic activity at a given location is crucial for financial and psychological well-being of the person This is very important for agriculture and other similar economic activities which leverage from physical characteristics of land and its location Acquisition of land uproots these economic activities and mandates relocation These changes may demand change of economic activity, based on the characteristic of the new location and personal circumstances Experience developed over time is essential for the success of trade Also, in many cases, it is difficult to develop new skills which can satisfactorily replace those acquired over many years of experience Thus, change of economic activity may cause serious loss of experience and expertise of original economic activity and may disturb the financial well-being of the affected person as discussed in the case of Bussell and Others v City of Edinburgh Council (1998)  CONCLUSION   109 4.1.3  Rights of the Landowner A bundle of rights accessible to landowners are usually summarized as the right to use, the right to exclude others and the right to dispose property (refer to Honoré, 1987 for more details) These rights are valued for the power they grant (e.g negotiation power) and opportunities they create for the landowners While each landowner (operating in the same regime of property rights) has equal access to each of these rights, they will differ in their ability to convert these rights into power and opportunities Therefore, termination of these rights consequential to the compulsory acquisition of land will have different levels of impact on each landowner, depending upon her capability to convert these rights into powers, opportunities and functionings Some of these opportunities growing from property rights are discussed in this section 4.1.3.1 Market Power to Negotiate in the Open Market Landowners enjoy the privilege of negotiating the deal in the open market, as granted to them under the right to dispose However, in the case of compulsory acquisition of property, the opportunity to negotiate is limited by the pre-decided outcome of forced sale In reference to the cases discussed under Chap 3, the loss of market power to negotiate is especially emphasized by those landowners who were considering sale prior to receiving acquisition notice and had offers from multiple buyers, thus being hopeful of leveraging from demand and competition among buyers Examples include the case of Young v City of Edinburgh Council (2001) and David Strang Steel and Richard Strang Steel v Scottish Ministers (2014) 4.1.3.2 O  pportunity to Make Strategic Investment in the Land Market, with the Hope of Receiving Financial Gains in the Future In reference to the use of property, investment and consumption are intrinsic to all properties Investment function of property is especially valuable to landowners for whom it is the primary purpose of property possession Compulsory acquisition of land of strategic investors causes loss of expected investment returns This is even more concerning if property investment is the primary business of the affected party, as observed in the case of Glenmore v Transco (2003) and Freshbright Cemeteries Limited v The City of Edinburgh Council (2001) The functioning of participating in land market speculation is often difficult to prove to the Tribunal, unless there is a provable loss of the 110   J RAO development potential This does not undermine the fact that investment in property, as an inbuilt component of property rights, is a valuable functioning, particularly for investor owners While there is special consideration in the Scottish legislature to home loss and farm loss1 (which are consumption uses of property), the loss of investment use of property is not recognized 4.1.3.3 O  pportunity to Choose a Convenient Time for Sale, Depending Upon an Individual’s (Physical) Availability to Be Able to Satisfactorily Manage the (Forced) Sale and Related Issues Sale of land and property is a major decision for a landowner, and the process, which involves activities such as market research, documentation and negotiation, requires active involvement of the landowner or the primary decision-maker In the process of compulsory purchase, it is often assumed that the landowners will make themselves available to attend to the process However, in the case of Julien v City of Edinburgh Council (2006), it was noted that the landowner could not make himself available at various occasions and it was difficult for him to remotely manage the process of sale and negotiation, to his satisfaction Even though the process of compulsory purchase allows for slight adjustments in the time schedule, to suit the availability of the landowner, the time frame for final decision-making is pre-decided The process of compulsory purchase is therefore different from the open market sale, in the sense that the latter gives the landowner the opportunity to prepare for sale and to initiate the process at a convenient time, depending upon her availability In the context of the case of Julien v City of Edinburgh Council (2006), the applicant expressed dissatisfaction over the value of land that was concluded in negotiation with the security holder of the property He was “contending that the settlement effected with Neilson’s did not effectively exhaust the value of the subjects.” The applicant (Julien) was often negotiating with the Tribunal to borrow time to be able to put his application “in shape.” He also expressed concern with the compulsory purchase procedure, the details of which are not mentioned in the case report  Home loss payments and farm loss payments are mentioned under Part III of the Land Acquisition Act 1973  CONCLUSION   111 4.1.3.4 Choice of Use to Which Land (Portion) Can Be Put Within the legally permissible range, landowners are rightful to put land to various uses, depending upon their requirements However, this range of permissible uses is at times reduced or nullified in certain portions of land on which servitude rights of some sort are applied For example, in the case of Marjory Gordon, Hugh Gordon and Executors of Hugh Gordon v National Grid Gas plc (2016), servitude rights for the gas pipeline were imposed on a portion of the land, and this limited the use of that portion to those types which can co-exist with the gas pipeline Imposition of servitude rights and consequential restrictions on the use of land portions reduces property value while also limiting landowners’ right to use all portions of the property 4.1.4  Securities for the Future Land is a non-perishable resource for employment and income generation This is an intrinsic security, which is especially valued by those who are skilled in land-based employment and possess the ability to produce (goods and income) from land Two forms of securities are discussed as functionings in this section 4.1.4.1 D  ependency on Land as a Fall-Back Option for Financial Security The discussions in the case of Emslie v Scottish Ministers (2014) brought forward the landowner’s dependency on her land as a fall-back option for income security in the eventuality of losing job In this case the landowner was a skilled farmer who was confident of creating employment and income for herself on land, if the need be In a broader sense, land is a reliable asset that can be used to raise money from the formal financial market through sale or mortgage Arranging alternate forms of financial security, such as land, is an important part of financial planning process for a family, which if disturbed may affect their well-being 4.1.4.2 Opportunity of Self-Employment on Land Land is a useful physical resource which can be used for employment generation for self and for others The argument of mixing labour in land is not new However, it is important to acknowledge the opportunity to use land for employment generation for self or for others, as a valuable 112   J RAO functioning of landowners Land guarantees security of employment, more directly to those who are skilled in land-based activities such as agriculture, as observed in the case of Emslie v Scottish Ministers (2014) 4.2   Conclusion and Future Research The nature of functionings discussed in these cases varied in nature from individualistic loss of a hobby to a more generalizable loss of development potential of land In a few cases landowners expressed dissatisfaction over specific losses that may otherwise be less important for other prospective users In reference to generalizability (in the context of Scotland), it may be reasonable to assume that wherever the Tribunal admitted the functioning as a compensable loss, it could be regarded as an important functioning for other landowners as well, thus being generalizable Also, these functionings are generalizable to other jurisdictions which share a common social, political, legal, economic and cultural environment in which landowners operate It is important to mention that the scope of discussion in this book is limited to the identification of functionings and refrains from commenting on the “fairness” of the Tribunal’s judgement That said, these findings pave way for future research towards derivation of a fairer mechanism of compensation for land Further analysis of the case discussions reveals that landowners often face challenges in providing evidences for the loss of many valuable functionings Provability of non-financial functionings is even more cumbersome The loss of such functionings may require more attention from policy makers who are working towards deriving a fairer compensation mechanism Also, it is interesting to note that the existing compensation mechanism accounts for the loss of only a few financial functionings, while the majority of other functionings, particularly non-financial functionings, are completely ignored There are empirical challenges in quantification of these functionings, and therefore it is not easy to devise an appropriate compensation strategy This is an area of concern for researchers and policy makers The idea of functionings is useful in identifying value of land in situations where “market value” is an inappropriate measure Compulsory acquisition is one such situation where “market value” does not encapsulate the value of functionings to the affected landowners This technique may also be useful in the valuation of informal properties2 which not  Informal properties are legally non-claimable in the court of law due to being unregistered, disputed, illegal occupancy or any other reason  CONCLUSION   113 necessarily offer the same set of functionings due to the restriction which come along with informality To explain more, the value attached to land, or any other scarce resource, is created not merely by the reason of it being scarce but also by the usefulness it generates and the functionings it offers to the user or owner The two factors of utility and scarcity together decide the demand and thus the value of scarce resources such as land In the context of property valuation exercise, this concept of valuation of functionings is especially useful in valuation exercise of informal properties Put another way, informal properties are transacted for the functionings created for the buyer operating under the legal constraint of being unable to claim the property in the court of law Like in any other market, property value in the informal market is derived from the value of uses or functionings it can generate for the owner While there are well-established methods of property valuation for the formally organized market, there is gap in knowledge on valuation of informal property, which includes slums and tribal land There is an initiative undertaken by the Global Land Tool Network of the UN-Habitat to identify tools and guidance on the valuation of unregistered land (Obeng-Odoom and McDermott, 2018) Future research on the topic may be useful in the context of deriving fair compensation for informal properties, which are very vulnerable to compulsory acquisition (ibid) Further research is required in understanding the (economic) value of each of these functionings for different landowners Social scientists and economists may dig further into understanding the (economic) value of each of these functionings with particular attention on non-financial losses of landowners There is serious effort required to find out ways in which the loss of functionings shall be minimized or compensated When viewed from the social lens, more specific inquiry, in the context of demography, for example, age, gender, class and so on, may help in understanding the role of land ownership in the development of “weaker” segments of the society Findings in this field of research may inspire policy makers to respond more efficiently towards deriving social equality for all the members of the society In summary, the well-being of each individual member of the society shall be the end objective of all development The distribution of fruits of development may not always be equal, and some may derive more benefit, depending upon their ability (financial, physical, intellectual, etc.) to convert resources to their usefulness There is a need to make the process of development more inclusive and equitable in a way that the welfare of all the members of the society is maximized 114   J RAO Bibliography Aberdeen City Council v Glen Morrison and another, LTS/SEV/2013/07 (Lands Tribunal for Scotland June 04, 2014) Retrieved September 10, 2016, from http://www.lands-tribunal-scotland.org.uk/decisions/disputed-compensa­ tion Auquhirie Land Company Limited v Scottish Hydro Electric Transmission plc, LTS/COMP/2014/38 (Lands Tribunal for Scotland August 10, 2016) Bussell and Others v City of Edinburgh Council, LTS/COMP/1997/8 (Lands Tribunal for Scotland September 11, 1998) Callum Stewart Macfarlane v North Lanarkshire Council, LTS/COMP/2011/02 (Lands Tribunal for Scotland October 27, 2011) Christies of Scotland Limited (Applicant) v Scottish Ministers (Respondents), LTS/COMP/2014/22 (Lands Tribunal for Scotland December 16, 2015) Claassen, R (2015) The Capability to Hold Property Journal of Human Development and Capabilities, 16(2), 220–236 Danzan Trust & The Dundas Estate v Edinburgh City Council, LTS/ COMP/2005/3 (Lands Tribunal for Scotland February 19, 2007) David Strang Steel and Richard Strang Steel v Scottish Ministers, LTS/ COMP/2013/12 (Lands Tribunal for Scotland October 13, 2014) Retrieved September 14, 2016, from http://www.lands-tribunalscotland.org.uk/decisions/disputed-compensation Dobbie v Fife Council, LTS/COMP/1996/8 (Lands Tribunal for Scotland January 14, 1998) Emslie v Scottish Ministers, LTS/COMP/2013/13 (Lands Tribunal for Scotland January 16, 2014) Fitzpatrick v The Coal Authority, LTS/COMP/2000/3 (Lands Tribunal for Scotland January 8, 2001) Freshbright Cemeteries Limited v The City of Edinburgh Council, LTS/ COMP/1997/4-7 (Lands Tribunal for Scotland March 19, 2001) G S Brown Construction Limited v S P Transmission Limited, LTS/ COMP/2002/2 (Lands Tribunal for Scotland May 30, 2003) Glenmore v Transco, LTS/COMP/2003/06 (Lands Tribunal for Scotland November 20, 2003) Honoré, T (1987) Making Law Bind: Essays Legal and Philosophical New York: Oxford University Press Julien v City of Edinburgh Council, LTS/COMP/1999/9 (Lands Tribunal for Scotland August 16, 2006) Marjory Gordon, Hugh Gordon and Executors of Hugh Gordon v National Grid Gas plc, LTS/COMP/2009/04 (Lands Tribunal for Scotland June 3, 2016)  CONCLUSION   115 McEwan v East Dunbartonshire Council, LTS/COMP/2004/03 (Lands Tribunal for Scotland December 22, 2004) Nussbaum, M.  C (2000) Women and Human Development: The Capabilities Approach Cambridge: Cambridge University Press Obeng-Odoom, F., & McDermott, M (2018) Valuing Unregistered Land London: Royal Institution of Chartered Surveyors (RICS) Rao, J (2018) Fundamental Functionings of Landowners: Understanding the Relationship Between Land Ownership and Wellbeing Through the Lens of ‘Capability’ Land Use Policy, 74–84 Robertson, King, McKinlay & Croll v Perth & Kinross District Council, LTS/ COMP/2003/2, 3, & (Lands Tribunal for Scotland December 9, 2004) SBC Properties Limited v Midlothian Council, LTS/VR/2001/2 (Lands Tribunal for Scotland November 19, 2002) Sen, A (1999) Commodities and Capabilites Amsterdam, New  York, Oxford: North Holland .. .Functionings of Land Jyoti Rao Functionings of Land Analysing Compulsory Acquisition Cases from Scotland Jyoti Rao University of Melbourne Melbourne, VIC, Australia... the valuable functionings (of land) for a landowner in Scotland? Identification of the unit/object of analysis Case reports prepared by the Lands Tribunal for Scotland are the objects of analysis... occurrence of discussions of functionings at the Lands Tribunal for Scotland 96 Loss of financial gains from expected and planned development104 Cases of reduction in market value of the subject