Zhang Lan v La Dolce Vita: Equitable Execution & Trust Dispute
The Appellate Division of the High Court of Singapore heard appeals (AD/CA 4-7/2023) by Zhang Lan and Success Elegant Trading Limited (SETL) against La Dolce Vita Fine Dining Company Limited and La Dolce Vita Fine Dining Group Holdings Limited. The appeals concerned the appointment of receivers over SETL's bank accounts, with the central issue being whether Zhang Lan was the beneficial owner of the funds. The court dismissed the appeals, affirming the lower court's decision that Zhang Lan was indeed the beneficial owner, thus justifying the receivership orders. The dispute arose from a prior share purchase agreement and subsequent arbitration awards.
1. Case Overview
1.1 Court
Appellate Division of the High Court1.2 Outcome
Appeals Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court affirms appointment of receivers over bank accounts, finding Zhang Lan the beneficial owner despite trust claims. Key issue: beneficial ownership.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Zhang Lan | Appellant, Defendant | Individual | Appeal Dismissed | Lost | Tham Lijing, Darren Tan, Kevin Cheng, Siew Wei Ying Silas, Yeo Hsien Yang Shane Anthony |
| La Dolce Vita Fine Dining Group Holdings Limited | Respondent, Plaintiff | Corporation | Appeal Upheld | Won | Han Guangyuan Keith, Angela Phoon Yan Ling |
| La Dolce Vita Fine Dining Company Limited | Respondent, Plaintiff | Corporation | Appeal Upheld | Won | Han Guangyuan Keith, Angela Phoon Yan Ling |
| Success Elegant Trading Limited | Appellant, Defendant | Corporation | Appeal Dismissed | Lost | Thio Shen Yi, Koh Li Qun Kelvin, Kevin Elbert, Tan Shi Ying Crystal, Phoon Wuei |
| Grand Lan Holdings Group (BVI) Limited | Defendant | Corporation | |||
| Qiao Jiang Lan Development Limited | Defendant | Corporation |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Woo Bih Li | Judge of the Appellate Division | Yes |
| Aedit Abdullah | Judge of the High Court | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Tham Lijing | Tham Lijing LLC |
| Darren Tan | Invictus Law Corporation |
| Kevin Cheng | Invictus Law Corporation |
| Siew Wei Ying Silas | Invictus Law Corporation |
| Yeo Hsien Yang Shane Anthony | Invictus Law Corporation |
| Thio Shen Yi | TSMP Law Corporation |
| Koh Li Qun Kelvin | TSMP Law Corporation |
| Kevin Elbert | TSMP Law Corporation |
| Tan Shi Ying Crystal | TSMP Law Corporation |
| Phoon Wuei | TSMP Law Corporation |
| Han Guangyuan Keith | Oon & Bazul LLP |
| Angela Phoon Yan Ling | Oon & Bazul LLP |
4. Facts
- La Dolce Vita Entities acquired 86.2% of South Beauty Investment Company Limited (SBIC) from Zhang Lan.
- SBIC experienced financial decline after the acquisition.
- La Dolce Vita Entities commenced arbitration against Zhang Lan for fraudulent and negligent representations.
- Arbitral Awards were granted to La Dolce Vita Entities.
- La Dolce Vita Entities obtained judgments in Hong Kong recognizing the Arbitral Awards.
- La Dolce Vita Entities registered the HK Judgments in Singapore.
- SUMs 2703 and 2704 were filed to appoint receivers over SETL's bank accounts.
- Zhang Lan transferred funds from her account to SETL's accounts.
- A Declaration of Trust was executed over US$10 in favour of Wang Xiaofei and his children.
- Zhang Lan directed transfers from SETL's accounts after the trust was established.
- SETL did not take action to challenge the Singapore Freezing Orders for seven years.
5. Formal Citations
- Zhang Lan v La Dolce Vita Fine Dining Group Holdings Ltd and other appeals, , [2023] SGHC(A) 22
- Zhang Lan v La Dolce Vita Fine Dining Group Holdings Limited, 4, Civil Appeal No 4 of 2023
- Zhang Lan v La Dolce Vita Fine Dining Company Limited, 5, Civil Appeal No 5 of 2023
- Success Elegant Trading Limited v La Dolce Vita Fine Dining Company Limited, 6, Civil Appeal No 6 of 2023
- Success Elegant Trading Limited v La Dolce Vita Fine Dining Group Holdings Limited, 7, Civil Appeal No 7 of 2023
- La Dolce Vita Fine Dining Company Limited v Zhang Lan, 1139/2020, Originating Summons No 1139/2020
- La Dolce Vita Fine Dining Group Holdings Limited v Zhang Lan, 1140/2020, Originating Summons No 1140/2020
6. Timeline
| Date | Event |
|---|---|
| Sale and purchase agreement for shares (SPA) signed | |
| First tranche of payment made to Zhang Lan | |
| Success Elegant Trading Limited (SETL) incorporated | |
| Zhang Lan set up bank accounts with Credit Suisse AG Bank (CS) and Deutsche Bank AG (DB) in Singapore under SETL’s name | |
| US$142,051,618 transferred from Zhang Lan’s SS Account to SETL’s bank account with CS | |
| US$85,225,000 transferred from the CS Account to SETL’s DB bank account | |
| Declaration of Trust executed | |
| Deed of Addition of Assets executed | |
| La Dolce Vita Entities sought injunctive relief against Zhang Lan and BVI Companies in Hong Kong Court of First Instance | |
| Hong Kong Freezing Orders granted | |
| Singapore Freezing Orders granted | |
| La Dolce Vita Entities commenced CIETAC arbitration | |
| Arbitral Awards obtained | |
| Singapore High Court allowed OS 1139 & 1140 | |
| SUMs 2703 and 2704 filed | |
| SETL added as a defendant to the action | |
| SUMs 2703 and 2704 heard before the Judge in chambers | |
| HC Judgment issued | |
| Zhang Lan filed AD 4 against LDV Group and AD 5 against LDV | |
| SETL filed AD 6 against LDV and AD 7 against LDV Group | |
| Judgment date | |
| Date of decision |
7. Legal Issues
- Beneficial Ownership
- Outcome: The court held that Zhang Lan remained the beneficial owner of the assets.
- Category: Substantive
- Equitable Execution
- Outcome: The court affirmed the appointment of receivers by way of equitable execution.
- Category: Procedural
- Permission to Appeal
- Outcome: The court determined that permission to appeal was not required.
- Category: Procedural
8. Remedies Sought
- Appointment of Receivers
- Enforcement of Judgment
9. Cause of Actions
- Negligent Representation
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Trust Litigation
- Enforcement of Judgments
11. Industries
- Food and Beverage
- Hospitality
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| La Dolce Vita Fine Dining Co Ltd v Zhang Lan and others and another matter | High Court | Yes | [2022] SGHC 278 | Singapore | Affirmed the lower court's decision that Mdm Zhang beneficially owned the assets. |
| Telecom Credit Inc v Midas United Group Ltd | Court of Appeal | Yes | [2019] 1 SLR 131 | Singapore | Defined the meanings of 'order' and 'interlocutory application' in the context of appeals. |
| OpenNet Pte Ltd v Info-communications Development Authority of Singapore | Court of Appeal | Yes | [2013] 2 SLR 880 | Singapore | Discussed the statutory scheme regarding the right to appeal. |
| Lee Kuan Yew v Tang Liang Hong and another and other suits | High Court | Yes | [1997] 1 SLR(R) 328 | Singapore | Discussed the purpose of appointing receivers under the Civil Law Act. |
| Lee Kuan Yew v Tang Liang Hong and another | High Court | Yes | [1999] 1 SLR(R) 533 | Singapore | Discussed the appointment of a receiver by way of equitable execution. |
| Pankhania v Chandegra | EWCA | Yes | [2012] EWCA Civ 1438 | England and Wales | Addressed the imposition of implied trusts in the presence of express trusts. |
| Lau Siew Kim v Yeo Guan Chye Terence and another | Court of Appeal | Yes | [2008] 2 SLR(R) 108 | Singapore | Discussed the circumstances in which a resulting trust arises. |
| Chan Yuen Lan v See Fong Mun | Court of Appeal | Yes | [2014] 3 SLR 1048 | Singapore | Discussed the establishment of a transferor’s lack of intention to benefit the transferee. |
| Moh Tai Siang v Moh Tai Tong and another | High Court | Yes | [2018] SGHC 280 | Singapore | Discussed the factual elements which give rise to a resulting trust. |
| Tan Yok Koon v Tan Choo Suan and another and other appeals | Court of Appeal | Yes | [2017] 1 SLR 654 | Singapore | Discussed the objective assessment of the subjective intentions of the transferor. |
| Acute Result Holdings Ltd v CGS-CIMB Securities (Singapore) Pte Ltd (formerly known as CIMB Securities (Singapore) Pte Ltd) | High Court | Yes | [2022] SGHC 45 | Singapore | Discussed the time at which to ascertain a transferor’s intention. |
| Nightingale Mayfair Ltd v Mehta and others | High Court | Yes | [1999] All ER (D) 1501 | England and Wales | Discussed the inference of intention when a trust is constituted for acquiring property through a holding company. |
| United Overseas Bank Ltd v Chief Emmanuel C Iwuanyanwu and another | High Court | Yes | [2001] All ER (D) 40 (Mar) | England and Wales | Discussed whether the defendant retained the beneficial interest in a property transferred to a company under his control. |
| NRC Holding Ltd v Danilitskiy and others | High Court | Yes | [2017] EWHC 1431 (Ch) | England and Wales | Discussed whether the defendant retained the beneficial interest in a property transferred to a company under his control. |
| Prest v Petrodel Resources Ltd and others | Supreme Court | Yes | [2013] 2 AC 415 | United Kingdom | Discussed whether assets legally vested in a company are beneficially owned by its controller. |
| La Dolce Vita Fine Dining Company Limited v Zhang Lan | Hong Kong Court of First Instance | Yes | [2018] HKCFI 548 | Hong Kong | Addressed whether Zhang Lan had breached the HK Freezing Orders by dissipating assets. |
| Skip v Harwood | Unknown | Yes | (1747) 3 Atk 564 | England and Wales | Discussed the equitable power to appoint a receiver. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Reciprocal Enforcement of Foreign Judgments Act (Cap 265, 2001 Rev Ed) | Singapore |
| Evidence Act 1893 (2020 Rev Ed) | Singapore |
| Supreme Court of Judicature Act 1969 (2020 Rev Ed) | Singapore |
| Civil Law Act 1909 (2020 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Beneficial Ownership
- Equitable Execution
- Resulting Trust
- Declaration of Trust
- Deed of Addition
- Receivership
- SG Freezing Orders
- HK Freezing Orders
- Arbitral Awards
- SPA
- SETL
- Asiatrust
- CIETAC
- Bank Accounts
15.2 Keywords
- Trust
- Beneficial Ownership
- Equitable Execution
- Receivership
- Singapore
- Judgment
- Appeal
16. Subjects
- Trust Law
- Civil Litigation
- Enforcement of Foreign Judgments
- Commercial Disputes
17. Areas of Law
- Trusts
- Civil Procedure
- Enforcement
- Equitable Execution
- Resulting Trusts