Lawyers for the Pakistani government have argued that its high commission is immune from ACT laws during a dispute with a builder over a $1 million debt.
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NSW builder Denham Constructions alleges the Pakistani government owes it $1 million for the construction of its new high commission complex in Canberra, which was completed in the middle of last year.
The builder said it was owed for cost overruns and building delays, and took the Islamic Republic of Pakistan to the ACT Supreme Court.
Denham is using the ACT's security of payment laws, designed to ensure parties are paid for construction work, to try to force Pakistan to pay the alleged debt.
But the Pakistani government is defending the claim. It says its high commission is not beholden to the ACT laws, including the security of payments legislation.
Instead, it argued its high commission was actually a part of the seat of government of the Commonwealth of Australia.
It was argued the land was "national land" that was subject to the "exclusive jurisdiction of the Commonwealth", lying outside the scope of legislative power of the ACT.
Associate Justice David Mossop said earlier this month that that argument may come as a "surprise" to the community.
"These propositions might, if correct, come as a surprise to the citizens of the Commonwealth and the Territory," he said.
"However, popular surprise is not any indication of the legal merit of the arguments."
The case was before the ACT Supreme Court last month because Denham was trying to have Associate Justice Mossop enter judgment in its favour without the need for a full hearing.
To do that, it needed to prove that the defence was "so obviously untenable that it cannot possibly succeed".
Denham alleges it told the defendant it was owed $1,027,000 debt in September last year, for works that took place before August 2015.
It is alleged that the Pakistani government provided no payment schedule to repay the debt, as required by law.
None of the money was repaid, Denham alleges, and so they have taken the matter to court.
Denham has also argued it is owed interest, which should accrue at a rate of $112.55 a day up to judgment.
The defendant argued firstly that Denham had not made a proper claim for payment as required by the ACT's security of payments legislation.
It also argued the communications from the high commission's architect to Denham represented the payment schedule that it was required to give the builder.
Associate Justice Mossop declined to find in Denham's favour without going to full hearing.
He said the defences put up by the Pakistani government warranted further exploration.
"The arguments put forward by the defendant do not appear to be strong ones, however, they are arguments which should be considered," he wrote.
The judge said he did not need to make any finding on "on the merits of the contention that the Embassy of the Islamic Republic of Pakistan was actually a part of the seat of government of the Commonwealth of Australia".
The new complex for the High Commission for the Islamic Republic of Pakistan was built in Perth Avenue in Canberra's diplomatic precinct, just opposite the Embassy of the United States.
