Service Charge Disputes: When a landlord’s certificate is both conclusive, and not…
On 18 January 2023, the Supreme Court handed down judgment in Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd  UKSC 2. The key issue was whether a certificate produced by the landlord, provided to be “conclusive” as to the service charge sum payable by the tenant (in the absence of manifest or mathematical error or fraud), prevented the tenant from withholding payment on the basis that certain charges were outside the landlord’s repairing covenant.
What did the court decide?
A 4-1 majority held that the certificate was conclusive as to the sum payable by the tenant. So, subject to the express defences of manifest or mathematical error or fraud, the tenant would have to pay the sum provided by the certificate (at ). There was also a no set-off clause which meant that a tenant could not hold up payment by asserting disputed claims (at ).
However, the majority held that the certificate was not conclusive as to the tenant’s underlying liability. Despite the no set-off clause, the tenant could later bring a claim seeking repayment of a cost said to be improperly charged (at ). In summary, the clauses relating to the certificate created a ‘pay now, argue later’ provision (at ).
Please click on this link for the full article by Daniel Webb on the judgment in Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd  UKSC 2 considering when a landlord’s certificate is ‘conclusive’.