[CHANCERY DIVISION]

WESTMINSTER CITY COUNCIL v. GOVERNMENT OF THE

ISLAMIC REPUBLIC OF IRAN

[1985 W. No. 5113]

Conflict of Laws - Sovereign immunity - Diplomatic immunity - Building used as embassy of foreign state - Foreign state breaking off diplomatic relations - Local authority seeking to register local land charges against property - Reference by Chief Land Registrar brought before court by originating summons - Foreign state refusing to accept service of summons - Whether court jurisdiction to entertain reference - Whether diplomatic immunity afforded to premises not currently in use as embassy

The city council in the exercise of its statutory powers shored up and made secure premises that were in a dangerous state which were owned by the Iranian government and had previously been used as its embassy. The city council, having unsuccessfully sought to recover its building costs from the Iranian government, registered its expenses as five local land charges and applied to the Land Registry to have the charges registered under the Land Registration Act 1925. The Iranian government, by solicitors, objected to the registration on the ground that the premises formed part of their diplomatic mission and therefore enjoyed diplomatic immunity. The Chief Land Registrar referred the matter to the court, requiring the city council to take out an originating summons or other appropriate originating process to bring the matter before the court. The city council took out an originating summons for which personal service was required but the Iranian government through their solicitors refused to accept service. Furthermore, the method prescribed by section 12(1) of the State Immunity Act 1978¹ for serving originating documents against a state was rendered impossible by the discontinuance of diplomatic relations between Iran and the United Kingdom.

On the question whether the court had jurisdiction to entertain the summons:-

Held, that once a dispute had arisen on the registration of a charge under the Land Registration Act 1925 it was not possible to treat the matter as ex parte whether at a hearing before the registrar or on a reference to the court; that an originating summons was the appropriate originating process for bringing the matter before the court and had to be served in accordance with section 12(1) of the State Immunity Act 1978; that there was nothing in either the Rules of the Supreme Court or the circumstances which made it proper to dispense with the requirement for personal service; and that, accordingly, since it had not been possible to effect service on the Iranian government the court could not rule on the question whether the charges should be registered (post pp. 982G-H, 983B-C, G, 984A).

Per curiam. The diplomatic immunity accorded to the

1 State Immunity Act 1978, s. 12(1): see post, p. 982E.

premises of a mission by article 22 of the Vienna Convention 1961 applies only to premises currently so used; the fact that premises have been so used in the past cannot be relevant to the state immunity afforded by the convention (post p. 984G-H).

No cases are referred to in the judgment or were cited in argument.

ORIGINATING SUMMONS

By an originating summons dated 4 October 1985 the plaintiffs, Westminster City Council, sought the determination of the following matter referred to the court by H.M. Chief Land Registrar by an order dated 1 July 1985 made under rule 298(2) of the Land Registration Rules 1925, namely, whether the five local land charges registered against premises owned by the defendant, the Government of the Islamic Republic of Iran, pursuant to section 6(1) of the London County Council (General Powers) Act 1955 on the local land charges register should be registered pursuant to the provisions of section 59(2) of the Land Registration Act 1925.

The facts are stated in the judgment.

P. B. Mauleverer Q.C. and J. Acton Davis for the plaintiffs.

The defendants did not appear and were not represented.

PETER GIBSON J. On 30 January 1979 the Provisional Revolutionary and Islamic Government of Iran, the name then adopted by the defendant, the Iranian government, was registered as the proprietor of 16, Princes Gate, London, S.W.1., and the premises were used as the Iranian embassy until May 1980. That property is within the area of the plaintiff, Westminster City Council. As many of us will have seen on our television screens, those premises were stormed by the Special Air Service in May 1980 to free some hostages held there, but unfortunately in consequence the property was gutted by fire. The building was left in a dangerous state. Pursuant to section 62 of the London Building Acts (Amendment) Act 1939, the district surveyor on 6 May 1980 certified the dangerous state of the premises and the city council proceeded in accordance with its statutory powers to shore up and secure the structure.

Thereby it incurred expenses, and by section 66 of the Act of 1939 such expenses are required to be paid by the owner of the building. Demands were made by the city council on the Iranian government, but such demands were not met. The city council then sought, in December 1981, to recover expenses which had been incurred by commencing proceedings in the Queen's Bench Division against the Iranian government, but such proceedings have, by reason of the State Immunity Act 1978, to be served on the Iranian Ministry of Foreign Affairs. There is no British embassy in Iran, and the Swedish embassy, which looked after British interests in Iran, was, perhaps understandably, not prepared to effect such service. Accordingly those proceedings were frustrated. By section 6(1) of the London County Council (General Powers) Act 1955 and section 1(1)(a) of the Local Land Charges Act 1975 the city council had the right to register the expenses as local land charges, and five local land charges were registered on dates between 5 August 1980 and 5 November 1982. Such charges by section 7 of the Act of 1975 take effect as if they had been created by a deed of charge by way of legal

mortgage within the meaning of the Law of Property Act 1925. By the proviso to section 59(2) of the Land Registration Act 1925, such charges cannot be realised unless registered under the Land Registration Act 1925.

The city council sought registration of its charges under the Land Registration Act 1925 on 11 April 1983, supporting its application by the certificate of the city council's solicitor. Such an application has potentially serious consequences for the Iranian government, because of the possibility that the property might be sold by the city council if the registration is allowed. But the city council's solicitor has deposed to the fact that the purpose of the city council in seeking registration was to protect the interests of the city council in the event, in particular, of a sale by the Iranian government. Indeed, the city council has offered an undertaking that without the leave of the court it would not itself initiate action to effect a sale of the property.

The Land Registry invited the comments of the Iranian government on the application. The Iranian government, by its solicitors, Messrs. Cathcart & Co. ( "Cathcarts"), objected to the registration on the ground that the property formed part of the diplomatic mission of the Iranian government and that state immunity applied. The Land Registry confirmed to the city council that apart from that objection its application was in order.

On 1 July 1985 the Chief Land Registrar made an order referring to this court the question whether the charges should be registered pursuant to the proviso to section 59(2) of the Land Registration Act 1925. The order of the Chief Land Registrar required the city council to "take out an originating summons or such other originating process as may be appropriate for the purpose of bringing the matter before the court." The city council took out an ordinary originating summons, using form 8 and naming the Iranian government as defendant. Under R.SC, Ord. 10, r. 5, personal service is required. No doubt the city council had the reasonable expectation that the Iranian government would want to support its objection by accepting service and appearing in these proceedings; but Cathcarts have refused to accept service on behalf of the Iranian government. They say they have no instructions to do so. Although Cathcarts have been supplied with the relevant documents and have been notified of the preliminary hearing before the master and of this hearing, the Iranian government still does not appear, and it still has not been served. Mr. Mauleverer, appearing for the city council, has therefore had the invidious task of not only presenting the city council's case but also performing his duty of drawing the attention of the court to those matters which might have been relied on by the Iranian government had it chosen to appear. I am very grateful to him for his very fair presentation of the possible difficulties in the way of the city council, and I have been much assisted by his argument.

Two questions arise, one procedural and the other the substantive question raised in the reference. The procedural question is whether the court is able to rule on the substantive question in the circumstances that it has not been possible to serve the only defendant, the Iranian government. Mr. Mauleverer submitted that the court can so rule. He first submitted that the hearing in this court is in effect an extension of the ex parte application before the Chief Land Registrar. It is true that

the registrar, on receiving an application for registration, can, if satisfied with that application and by the evidence in support, make an order without serving the evidence on the party affected thereby. But if a dispute arises as to the registration of a charge, then the registrar comes under a mandatory obligation. Under rule 298(1) of the Land Registration Rules 1925, in that event the registrar shall hear and determine the matter, and by rule 300 he must serve notice that he will hear and determine the matter at the registry on all persons appearing to be interested, stating the time of such hearing and that such persons may attend before him at that time in person or by solicitors or counsel. It is therefore to my mind clear that once a dispute has arisen the matter cannot properly be described as being ex parte, but that a party known to be interested must be given the opportunity of appearing.

The registrar, however, under rule 298(2) may, if he thinks fit, instead of determining the question himself, refer the matter at any stage or any question thereon for the decision of the court, and "the court" for that purpose means the Chancery Division, and the matter falls to be determined by a single judge of this division: see section 138(2) of the Land Registration Act 1925, as amended by the Administration of Justice Act 1982 and R.SC, Ord. 93, r. 10. Rule 298(2) of the Rules of 1925, therefore, allows a dispute to be resolved, if the registrar chooses, by the court instead of by himself. One would therefore expect that the same obligation to serve notice of the hearing on interested parties would arise in the case of court proceedings.

Mr. Mauleverer then drew my attention to section 12(1) of the State Immunity Act 1978. By that subsection

"Any writ or other document required to be served for instituting proceedings against a state shall be served by being transmitted through the Foreign and Commonwealth Office to the Ministry of Foreign Affairs of the state and service shall be deemed to have been effected when the writ or document is received at the ministry."

That is subject to subsection (6), which allows the service of a writ or other document in any manner to which the state has agreed. He submitted that despite the mandatory nature of section 12(1) it had no application because the originating summons was not a document required to be served for instituting proceedings against a state, but was merely a document chosen as a convenient method of bringing the matter before the court in compliance with the Chief Land Registrar's order. I regret that I cannot accept this. It is true that the Chief Land Registrar by his order was not insisting on an originating summons and that any other appropriate originating process could have been used, although in my judgment the originating summons was the correct form: see R.SC, Ord. 5, r. 3. But whatever originating process was chosen, it must have been envisaged that the city council would be instituting proceedings as plaintiff and the only other known interested party, the Iranian government, would be defendant, and that by analogy with rule 300 of the Land Registration Rules 1925 the Iranian government would be served with the proceedings, so that it could participate in the hearing before the court. It seems to me, therefore, that the wording of the opening words of section 12(1) of the State Immunity Act 1978 is satisfied in the present case.

There are some ex parte originating proceedings provided for under the Rules of the Supreme Court, for example an ex parte originating summons, and Mr. Mauleverer submitted that I should treat the form 8 originating summons as though it were an ex parte originating summons. If such an ex parte application were an appropriate originating process, the fact that another form of originating summons had been used would not have deterred me from exercising the power in R.SC, Ord. 2 and from treating the application as one made by the appropriate mode; but I find it impossible to say that on a dispute arising under the Land Registration Act 1925 it would be appropriate for an ex parte originating process to be used. It is known that there is a dispute between the city council as applicant for registration and the Iranian government as objector. It seems to me, therefore, to be contrary to principle in those circumstances to treat the matter as though it were an ex parte originating process. Mr. Mauleverer accepts that if section 12 of the Act of 1978 does apply there can be no question of ordinary substituted service, section 12 providing the only mode of service in mandatory terms.

Mr. Mauleverer then argued that R.S.C., Ord. 32, r. 5(1) and (2) (made applicable to originating summonses by Ord. 28, r. 1) gave the court power to dispense with service. R.S.C., Ord. 32, r. 5 provides:

"(1) Where any party to a summons fails to attend on the first or any resumed hearing thereof, the court may proceed in his absence if, having regard to the nature of the application, it thinks it expedient so to do. (2) Before proceeding in the absence of any party the court may require to be satisfied that the summons or, as the case may be, notice of the time appointed for the resumed hearing was duly served on that party."

It was submitted that Ord. 32, r. 5(1) applied because the Iranian government had failed to attend; but the failure to attend which is referred to in rule 5(1) to my mind connotes that someone who has been duly served with a summons has failed to attend. Ord. 32, r. 5(2), Mr. Mauleverer submitted, gave the court a discretion to dispense with service because of the terms of that rule "The court may require to be satisfied that the summons was duly served." But I do not read this rule as a power to dispense with service. To my mind it is concerned with proof of service, and it puts a party on notice that proof of service on a person not attending may be insisted upon by the court. In my judgment the rule would be in a different form if it were directed at allowing dispensation with service. There are, of course, special and express provisions in the Rules of the Supreme Court allowing dispensation with service in particular cases, and the contrast with the present rule is to my mind marked.

Mr. Mauleverer also reminded me of the wide discretion conferred on the court by R.SC, Ord. 2, r. 1 to dispense with requirements of the rules. But I do not regard it as proper in the circumstances of the present case to treat an application, which to my mind was rightly framed as an inter partes proceeding, as an ex parte application. Of course, the rules do provide for some ex parte applications (see for example R.SC, Ord. 50, r. 1(2)), but again the contrast between such a provision and the present case is marked. One would expect an express provision dealing with the matter.

In the result I find myself forced to the conclusion that I cannot rule on the question referred to the court without prior service on the Iranian government. I reach this conclusion with no satisfaction whatsoever. I find it disquieting that the Iranian government, having raised an objection, can frustrate the resolution by the court of the question thereby raised by not being willing to accept service through the solicitors who raised the objection on their behalf. But, as Mr. Mauleverer accepts, by taking a state immunity objection the Iranian government has not submitted in any way to the jurisdiction (section 2 of the State Immunity Act 1978), and further I recognise that the particular problem in the present case arises only because of the exceptional circumstance that the method of service provided for by section 12 of the Act of 1978 is or may be for the time being impractical.

In case I am wrong on the procedural question, I shall express my view briefly on the substantive question. Cathcarts, in their objection on behalf of the Iranian government, relied on article 22 of the Vienna Convention 1961, which is one of the articles having, by reason of the Diplomatic Privileges Act 1964, the force of law in the United Kingdom. Cathcarts claimed that the premises at 16, Princes Gate still form part of the diplomatic mission of Iran in this country. Paragraphs 1 and 2 of article 22, to which Cathcarts referred, read:

"1. The premises of the mission shall be inviolable. The agents of the receiving state may not enter them, except with the consent of the head of the mission. 2. The receiving state is under a special duty to take all appropriate steps to protect the premises of the mission against any intrusion or damage and to prevent any disturbance of the peace of the mission or impairment of its dignity."

For the sake of completeness I should read paragraph 3:

"The premises of the mission, their furnishings and other property thereon and the means of transport of the mission shall be immune from search, requisition, attachment or execution."

The references to the premises of the mission must however, be read with the definition provided in article 1(i).

"The 'premises of the mission' are the buildings or parts of buildings and the land ancillary thereto, irrespective of ownership, used for the purposes of the mission including the residence of the head of the mission."

The key word, as Mr. Mauleverer submitted, is "used." That must connote the present tense "which are used." The fact that premises have been used in the past cannot be relevant to the state immunity afforded by the Vienna Convention 1961. The evidence is clear that since May 1980 the premises have not been used. The premises are in such a state now that they could not be used without extensive rebuilding.

The Foreign and Commonwealth Office, in a letter dated 2 November 1984, expressed to the city council the view that the building no longer constituted the premises of the Iran mission within the meaning of article 1(i). I agree. It seems to me clear beyond argument that the premises have ceased to be used for the purposes of the mission, and in

those circumstances the provisions of article 22 have no application to the premises. But, for the reasons which I have endeavoured to give, I find myself unable to give a ruling for the purposes of the reference to this court.

Solicitors: City Solicitor, Westminster City Council.

[Reported by SARAH WADHAM, Barrister-at-Law.]