Kenya Medical Association v Machiri Limited [2021] KEELC 1280 (KLR)

Facts

The respondent, Machiri Limited, entered into written tenancy agreements with the appellant, Kenya Medical Association, for two dwelling units located in Kilimani, Nairobi. The appellant used the premises for commercial purposes without the respondent's knowledge and approval, leading to VAT penalties being levied against the respondent.

Issues

1. Whether the appellant was liable to pay VAT to the respondent as a consequence of using the demised premises for commercial purposes instead of using them as dwelling houses.
2. Whether the respondent proved their claim for Kshs 702,561 as required under the law.
3. Whether the respondent was entitled to general damages for breach of contract.
4. What order should be made in relation to costs.

Reasoning

The court found that the appellant was liable to pay VAT as the premises were used for commercial purposes instead of dwelling houses. The respondent failed to prove the exact amount paid to Kenya Revenue Authority. General damages were not payable as the breach was not intentional. The appellant triggered the dispute and played a role in it.

Outcome

The appeal is allowed and the judgment and decree of the trial court are set aside.

Authorities cited