Glassberg v UBS AG: Striking Out Claims for Losses in Direct Lending Income Fund
In Glassberg v UBS AG, the High Court of Singapore addressed the plaintiff Jonathan William Glassberg's claims against UBS AG, Singapore Branch, concerning losses from an investment in the Direct Lending Income Fund (DLIF). Glassberg alleged both contractual and tortious breaches by UBS. The court allowed the defendant's appeal in part, striking out the plaintiff's contract claims but affirming the assistant registrar's decision to dismiss the defendant's application to strike out the plaintiff's tortious claim. The court found that the contract claims were unsustainable because the APA service was not engaged. The court found that the tort claim was sustainable because a duty of care may have arisen.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Appeal Allowed in Part
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Jonathan Glassberg sues UBS AG for losses from a Direct Lending Income Fund investment. The court struck out contract claims but allowed the tort claim to proceed.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Jonathan William Glassberg | Plaintiff, Appellant | Individual | Appeal Allowed in Part | Partial | Yu Kexin |
| UBS AG, Singapore Branch | Defendant, Respondent | Corporation | Contract Claims Struck Out, Tort Claim to Proceed | Won, Lost | Teo Chun-Wei Benedict, Lee Wei Alexander, Lim Siyang Lucas |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| See Kee Oon | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Yu Kexin | Yu Law |
| Teo Chun-Wei Benedict | Drew & Napier LLC |
| Lee Wei Alexander | Drew & Napier LLC |
| Lim Siyang Lucas | Drew & Napier LLC |
4. Facts
- The plaintiff, Jonathan William Glassberg, was a customer of the defendant, UBS AG, Singapore Branch.
- The plaintiff invested in the Direct Lending Income Fund (DLIF) after receiving recommendations from Mr. Stephan Freh, an employee of the defendant.
- The plaintiff subscribed to the defendant’s “UBS Advice Premium – Active Portfolio Advisory Service” (APA Service) from September 2016 to May 2018.
- Mr. Freh sent an email to the plaintiff stating that the DLIF was “not a UBS recommendation”.
- The plaintiff invested US$1m in the DLIF on 29 November 2017 and a further US$1.5m on 23 February 2018.
- Allegations of fraud by DLI and its CEO emerged, and the plaintiff lost his investment of US$2.5m in the DLIF.
- The plaintiff commenced a suit against the defendant, claiming breach of contract and tortious duties.
5. Formal Citations
- Glassberg, Jonathan William v UBS AG, Singapore Branch, Suit No 1043 of 2021 (Registrar’s Appeal No 275 of 2022), [2022] SGHC 314
6. Timeline
| Date | Event |
|---|---|
| Account Opening Form dated | |
| Plaintiff subscribed to the defendant’s “UBS Advice Premium – Active Portfolio Advisory Service” | |
| Mr Freh sent an e-mail to the plaintiff titled “DLIF” introducing the DLIF as a potential investment | |
| Mr Freh sent an e-mail to the plaintiff with the same subject title of “DLIF”, inquiring whether the plaintiff was interested in investing in the DLIF | |
| Plaintiff invested US$1m in the DLIF | |
| Mr Freh sent an e-mail to the plaintiff titled “Suggestions” providing investment advice including recommendations of certain investments to the plaintiff for his consideration | |
| Plaintiff invested a further US$1.5m in the DLIF | |
| Plaintiff terminated the APA Service | |
| Allegations of a multi-year fraud by DLI and its Chief Executive Officer, Brendan Ross, emerged | |
| Plaintiff commenced the Suit against the defendant to recover his losses | |
| Hong Jia’s 1st affidavit dated | |
| Jonathan William Glassberg’s 1st affidavit dated | |
| Hong Jia’s 2nd affidavit dated | |
| Certified Transcript dated | |
| Oral remarks delivered | |
| Judgment Date |
7. Legal Issues
- Breach of Contract
- Outcome: The court struck out the plaintiff's claim for breach of contract, finding that the APA service was not engaged and the Investment Terms and Conditions did not apply.
- Category: Substantive
- Sub-Issues:
- Interpretation of contract terms
- Applicability of Investment Terms and Conditions
- Breach of implied term
- Negligence
- Outcome: The court allowed the plaintiff's claim for negligence to proceed, finding that a duty of care may have arisen and that the General Terms and Conditions did not clearly preclude a duty of care in tort from arising.
- Category: Substantive
- Sub-Issues:
- Duty of care
- Voluntary assumption of responsibility
- Reliance
- Exclusion clauses
- Reasonableness under UCTA
- Causation
- Novus actus interveniens
- Estoppel
- Outcome: The court found that there was no basis for estoppel to apply.
- Category: Procedural
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Negligence
10. Practice Areas
- Commercial Litigation
11. Industries
- Financial Services
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Letchimy d/o Palanisamy Nadasan Majeed (alias Khadijah Nadasan) v Maha Devi d/o Palanisamy Nadasan (administrator of the estate of Devi d/o Gurusamy, deceased) | High Court | Yes | [2021] 1 SLR 970 | Singapore | Cited for the principle that it is not strictly necessary to expressly plead the words “estoppel” in the Statement of Claim. |
| Tembusu Growth Fund II Ltd and another v Yee Fook Khong and another | High Court | Yes | [2020] SGHC 104 | Singapore | Cited for the principle that the material facts giving rise to the estoppel (especially the representation(s) relied upon) and the elements of the estoppel to be pleaded with sufficient particularity |
| Deutsche Bank AG v Chang Tse Wen and another appeal | Court of Appeal | Yes | [2013] 4 SLR 886 | Singapore | Cited for the principle that it is necessary to examine all the facts including those leading up to the conclusion of a contract and a duty of care in tort may still arise on those facts. |
| Koh Kim Teck v Credit Suisse AG, Singapore Branch | High Court | Yes | [2015] SGHC 52 | Singapore | Cited for the principle that the proper construction of the various contractual terms relied upon may involve findings of fact which are best resolved at trial. |
| Press Automation Technology Pte Ltd v Trans-Link Exhibition Forwarding Pte Ltd | High Court | Yes | [2003] 1 SLR(R) 712 | Singapore | Cited for the principle that the determination of whether a particular clause is reasonable is an extremely fact specific inquiry. |
| Rubenstein v HSBC Bank plc | England and Wales Court of Appeal (Civil Division) | Yes | [2012] EWCA Civ 1184 | England and Wales | Cited for the principle that it would not be appropriate to conclusively determine whether the fraud within DLI constituted a novus actus interveniens at this juncture, as it would properly require an exercise in “legal judgment” having had full appreciation of the facts of the case |
13. Applicable Rules
| Rule Name |
|---|
| Order 18 Rule 19(1) of the Rules of Court |
| Order 18 Rule 8(1) of the Rules of Court |
| Order 40A Rule 3 of the Rules of Court |
| Order 41 Rule 5(1) of the Rules of Court |
| Order 41 Rule 5(2) of the Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Unfair Contract Terms Act 1977 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Direct Lending Income Fund
- UBS Advice Premium – Active Portfolio Advisory Service
- Investment specialist
- Investment universe
- Client advisor
- Estoppel
- Duty of care
- Novus actus interveniens
15.2 Keywords
- UBS
- Direct Lending Income Fund
- Investment
- Negligence
- Breach of Contract
- Striking Out
16. Subjects
- Contract Law
- Tort Law
- Financial Services
- Investment Advisory
- Civil Procedure
17. Areas of Law
- Civil Procedure
- Striking out
- Contract Law
- Tort Law
- Financial Law