Shamina Holdings (Private) Limited v Tribac Tobacco (Private) Limited and Others

The first respondent (Tribac Tobacco) lent US$50,000 to the applicant (Shamina Holdings) in May 2017 at 12% interest per annum, initially for twelve months and later extended for another year. As security, the applicant surrendered title deeds to its Megawatt Court apartment (deed of transfer 4373/2012) and signed a power of attorney allowing the first respondent to pass a mortgage. The applicant made part payment in US dollars and cleared the balance in Zimbabwe dollars after 22 February 2019 (the effective date of SI 33/2019 introducing the RTGS dollar). The applicant paid US$6,000 and ZW$57,467.74, totaling $63,467.74, which exceeded the capital and interest of $63,000 when calculated at the 1:1 parity rate. The first respondent refused to return the title deeds, demanding payment at the interbank rate, claiming an outstanding balance of US$56,859. The second respondent was the director of the first respondent and the third respondent was an employee who witnessed the agreement.

• Whether the second and third respondents (director and employee) should have been joined as parties to proceedings against a company
• Whether the applicant discharged its contractual loan obligations
• At what exchange rate should a loan incurred before 22 February 2019 be repaid after that date - at 1:1 parity or at the interbank rate?
• Whether the applicant was entitled to specific performance requiring return of title deeds
• The interpretation and application of s 4(1)(d) of SI 33/2019 and s 22(1)(d) of the Finance No. 2 Act of 2019

The court ordered: (a) The first respondent to surrender the applicant's title deeds under deed of transfer 4373/2012 to the applicant; (b) Any encumbrance placed on the property be set aside; (c) The counter-application be dismissed; (d) The first respondent to pay the applicant's costs.

The binding legal principles established are: (1) Directors and employees of a company should not be joined as parties to proceedings concerning obligations of the company, as a company is a separate legal person with full legal capacity under s 19 of the Companies and Other Business Entities Act; (2) Debts and liabilities denominated in US dollars and incurred before 22 February 2019 must be converted and discharged at the 1:1 parity rate prescribed by s 4(1)(d) of SI 33/2019, not at the interbank exchange rate; (3) Once conversion is made at the statutory 1:1 rate for pre-existing debts, no further exchange rate adjustments apply - the converted value remains constant; (4) Section 22(1) of the Finance No. 2 Act 2019 retrospectively validated SI 33/2019 but did not alter the substantive currency conversion principles for domestic pre-existing obligations established in that instrument.

The court observed that the respondents' opposing affidavit did not respond to the applicant's allegations in the normal paragraph-by-paragraph approach but rather in a general fashion, making it difficult to ascertain what was specifically being denied. The court stated that what is not specifically and unambiguously denied in an opposing affidavit should be deemed admitted. The court also noted that any attempt to stretch the meaning of the retrospective effect of SI 33/2019 beyond what was stated in Breastplate Service would amount to conjecture, and that if the Supreme Court intended to depart from Zambezi Gas, it would have stated so explicitly. The court emphasized the distinction between foreign obligations (subject to different treatment under Breastplate Service) and domestic obligations (governed by Zambezi Gas principles).

This case is significant in Zimbabwean law (though this is a Zimbabwean case, not South African) for clarifying the application of currency conversion regulations to pre-existing debt obligations. It confirms that debts incurred before the introduction of the RTGS dollar on 22 February 2019 are subject to the 1:1 parity rate prescribed in SI 33/2019, and creditors cannot demand repayment at the interbank rate. The judgment reinforces the principle of separate legal personality of companies and the impropriety of joining directors/employees as parties for company obligations. It also demonstrates the importance of proper pleading practice - failure to specifically deny allegations in an opposing affidavit may result in deemed admissions.