JUDGMENT OF THE COURT
The facts that form the basis of the dispute now before this Court go back in time to 10th May 1989. On this occasion, the parties to this appeal entered into a lease agreement for an education institution known as Gusii Highlights High School together with the premises therein. The appellant was the Lessor, whereas the respondent was the Lessee. By a variation of the lease agreement dated 22nd February, 1994 the rent payable until the year 2002 was mutually agreed. Further the parties agreed that the respondent could at his own expense build more classrooms and other supporting or necessary amenities. Pursuant to that agreement, the respondent constructed 19 buildings at a cost of Kshs. 2 million valued at Kshs. 12,800,000/- as at June 1998. This expansion transformed the school into a prestigious learning institution within the then Kisii District.
In or about October 1995, the appellant requested and was advanced a sum of Kshs. 300,000/- by the respondent on the…