Florence Wanjiku Gitau v Natu Investments Limited & another [2020] eKLR Case Summary

Court
High Court of Kenya at Nairobi, Commercial & Tax Division
Category
Civil
Judge(s)
F. Tuiyott
Judgment Date
October 14, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3

Case Brief: Florence Wanjiku Gitau v Natu Investments Limited & another [2020] eKLR


1. Case Information:
- Name of the Case: Florence Wanjiku Gitau v. Natu Investments Limited & Chabrin Agencies Limited
- Case Number: HCCC NO. 862 OF 2010
- Court: High Court of Kenya at Nairobi, Commercial & Tax Division
- Date Delivered: 14th October 2020
- Category of Law: Civil
- Judge(s): F. Tuiyott
- Country: Kenya

2. Questions Presented:
The court was tasked with resolving several legal issues arising from the agreement between the parties, including:
- Whether Chabrin Agencies Limited acted as an agent for both the Plaintiff and the 1st Defendant.
- The Plaintiff's entitlement to refunds for income tax, VAT, refundable deposits, and increased license fees.
- The obligations of the Defendants regarding tax liabilities and the management of license fees.

3. Facts of the Case:
Florence Wanjiku Gitau, the Plaintiff, was the registered owner of land known as LR. No. 1/121 in Nairobi, which she leased to Natu Investments Limited (1st Defendant) for ten years. Upon the lease's expiration, an agreement was made on 31st August 2009, wherein Natu sold improvements made on the property to Gitau. Chabrin Agencies Limited (2nd Defendant) was appointed to manage the collection of license fees. Gitau alleged breaches of the agreement by both Defendants, including failing to remit taxes and manage the property according to the agreement.

4. Procedural History:
The case progressed through the High Court, where Gitau filed an amended plaint detailing the breaches by the Defendants. Natu filed a defense denying liability for Gitau's tax obligations and asserting that it had fulfilled its responsibilities under the agreement. Chabrin also filed a defense asserting it acted solely on behalf of Natu. A joint audit was ordered by the court, and the case proceeded to trial with testimony from multiple witnesses.

5. Analysis:
- Rules: The court considered the terms of the sale agreement, particularly Clauses 2, 3, and 5, which outlined the responsibilities of the parties regarding the management of license fees and tax obligations.
- Case Law: The court referenced previous rulings that established principles regarding agency relationships, including the necessity of consent and the implications of conduct in establishing such relationships.
- Application: The court reasoned that Chabrin acted as an agent for both parties based on the evidence presented, including the conduct of the parties. It determined that Gitau was entitled to refunds for VAT and refundable deposits, while the claims for income tax were denied as they were deemed personal obligations of Gitau.

6. Conclusion:
The court ruled in favor of Gitau, awarding her Kshs. 3,185,289 for refundable deposits, Kshs. 808,737 for underpaid VAT, and Kshs. 1,569,719 for increased license fees, along with interest and costs. The court dismissed the claims against Chabrin, concluding that it had not conspired or colluded with Natu.

7. Dissent:
There were no dissenting opinions noted in the judgment.

8. Summary:
The court's ruling clarified the obligations of the parties under the sale agreement and established that Gitau was entitled to certain refunds due to breaches by the Defendants. The decision has implications for future cases regarding agency relationships and the responsibilities of parties in contractual agreements. The judgment emphasized the importance of adhering to contractual terms and the consequences of failing to fulfill obligations.

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