Case Details
- Citation: [2022] SGHC 314
- Title: Glassberg, Jonathan William v UBS AG, Singapore Branch
- Court: High Court of the Republic of Singapore (General Division)
- Date of Decision: 15 December 2022
- Judges: See Kee Oon J
- Case Type: Civil Procedure — Striking out
- Suit No: HC/S 1043 of 2021
- Registrar’s Appeal No: RA 275 of 2022
- Plaintiff/Applicant: Jonathan William Glassberg
- Defendant/Respondent: UBS AG, Singapore Branch
- Procedural History: Defendant applied to strike out the entirety of the plaintiff’s claims (HC/SUM 1706/2022). The Assistant Registrar dismissed the application. Defendant appealed (HC/RA 275/2022). The High Court allowed the appeal in part and struck out the contract claims, while affirming dismissal of the strike-out application as to the tortious claim.
- Hearing Dates: 10 and 13 October 2022 (oral remarks delivered on 13 October 2022; full grounds provided on 15 December 2022)
- Judgment Length: 37 pages; 10,126 words
- Legal Areas: Civil Procedure — Striking out
- Statutes Referenced: Unfair Contract Terms Act (and references to the Unfair Contract Terms Act 1977)
- Key Substantive Themes: Investment advisory/monitoring services; contractual interpretation of investment terms; whether an “APA Service” was engaged; estoppel arguments; implied terms; causation in tort; strike-out under O 18 r 19 of the Rules of Court.
- Cases Cited (as provided): [2015] SGHC 52; [2020] SGHC 104; [2022] SGHC 314
Summary
This decision concerns an application to strike out a customer’s claims against UBS AG, Singapore Branch, arising from losses suffered after the customer invested in the Direct Lending Income Fund (“DLIF”). The plaintiff, Jonathan William Glassberg, brought both contractual and tortious claims. The defendant applied under O 18 r 19(1) of the Rules of Court to strike out the entirety of the suit, contending that the claims were factually and legally unsustainable and, in any event, that the defendant did not cause the plaintiff’s loss.
The High Court (See Kee Oon J) allowed the defendant’s appeal in part. The court struck out the plaintiff’s contract claims premised on alleged breach of contractual duties under the Investment Terms & Conditions (“Investment T&Cs”) and an implied term. However, the court affirmed the Assistant Registrar’s dismissal of the strike-out application as it related to the tortious claim. In other words, while the contractual route was not viable at the pleadings stage, the tortious claim was allowed to proceed.
What Were the Facts of This Case?
The plaintiff opened an account with UBS in April 2012 and was assigned a client advisor, Mr Stephan Freh. In that capacity, Mr Freh provided investment advice and recommendations. In September 2016, the plaintiff subscribed to UBS’s “UBS Advice Premium – Active Portfolio Advisory Service” (“APA Service”), which the plaintiff later terminated in May 2018. The APA Service, as described in the parties’ materials, involved direct access to an investment specialist who would render investment advice and monitor assets within the bank’s “investment universe”.
After subscribing to the APA Service, the parties’ relationship was governed by three documents: the Account Opening Form, the General Terms & Conditions (“General T&Cs”), and the Investment Services Terms & Conditions (“Investment T&Cs”). A critical contractual feature was that Section II of the Investment T&Cs applied only when the APA Service had been engaged. The court treated this as a threshold issue: if the APA Service was not engaged for the relevant investment, then only the General T&Cs would apply, and the plaintiff’s reliance on Section II would fail.
The plaintiff’s investment in the DLIF occurred between 18 August 2017 and 23 February 2018, during which Mr Freh communicated with him by email and phone regarding the DLIF. The DLIF fact sheet, first emailed on 18 August 2017, described the fund as a financier of non-bank lenders seeking to benefit from a “regulatory premium” arising from disruptions to traditional bank lending. The plaintiff invested US$1 million on 29 November 2017 and a further US$1.5 million on 23 February 2018, totalling US$2.5 million.
Correspondence and communications showed that Mr Freh introduced the DLIF as not being a “UBS recommendation” and attached fact sheets containing risk disclosures. Over time, Mr Freh continued to advise and recommend further investment, including references to his own personal investment and discussions about due diligence and the possibility of fraud. In 2019, allegations emerged of a multi-year fraud by the DLIF’s investment advisor/manager, DLI, and its CEO. Following regulatory action (including a complaint by the US Securities and Exchange Commission), DLI was placed under liquidation and the plaintiff lost his DLIF investment, prompting the present suit.
What Were the Key Legal Issues?
The central procedural question was whether the plaintiff’s claims should be struck out under O 18 r 19(1)(a), (b), (c) and (d) of the Rules of Court, and/or under the court’s inherent jurisdiction. Although strike-out is a draconian remedy, the defendant argued that the pleadings disclosed no reasonable cause of action and/or that the claims were bound to fail because of contractual and causation defects.
For the contract claims, the court had to determine several interrelated issues. First, whether the APA Service had to be provided by “investment specialists” of the defendant, and whether the plaintiff’s pleaded case could establish that requirement. Second, whether the defendant was estopped from asserting that the DLIF was not within the defendant’s “investment universe”. Third, whether there was a breach of contractual duties under the relevant clauses of the Investment T&Cs. Fourth, whether there was a breach of an implied term requiring reasonable skill and care in rendering investment advisory or monitoring services.
For the tort claim, the key issue was causation: even if there were alleged failures in the provision of investment advisory or monitoring services, the plaintiff had to plead a sufficient causal link between the defendant’s conduct and the loss. The court also had to consider whether the tortious claim was legally and factually sustainable at the pleadings stage, given the nature of the fund’s fraud and the role of third parties.
How Did the Court Analyse the Issues?
The court’s analysis began with the contractual architecture of the parties’ relationship. The plaintiff’s contract claims were largely premised on alleged breaches of Section II of the Investment T&Cs. The court therefore focused on whether the APA Service was engaged such that Section II applied to the DLIF investment. This was not a mere factual dispute; it was a threshold legal condition embedded in the contract. The court’s approach reflects a common principle in strike-out applications: where the pleaded cause of action depends on a contractual precondition, the court may examine whether the pleadings can realistically satisfy that precondition.
On the question whether the APA Service had to be provided by investment specialists, the court considered the pleaded case and the contractual terms governing the APA Service. The plaintiff’s argument, in essence, was that the APA Service had been engaged and that the defendant’s obligations under Section II were triggered. The defendant’s position was that the APA Service was not engaged for the DLIF investment because Mr Freh was not a designated investment specialist and because the DLIF was outside the defendant’s investment universe and not subject to monitoring. The court ultimately concluded that the contract claims were not viable on the pleaded basis, and it struck them out.
The court also addressed the plaintiff’s estoppel argument. The plaintiff contended that the defendant should be estopped from asserting that the DLIF was not within the investment universe. Estoppel in this context would require the plaintiff to show, at minimum, that there was a representation or assurance relied upon to the plaintiff’s detriment, and that it would be unconscionable for the defendant to resile from that position. In a strike-out setting, the court assessed whether the pleadings disclosed the necessary elements of estoppel with sufficient clarity and whether the pleaded facts could support the legal conclusion. The court’s reasoning led to the conclusion that the contract claims could not survive.
Turning to breach of contractual duties and implied terms, the court considered the plaintiff’s pleaded reliance on specific clauses (including cll 1, 3.1, 4.1, 4.2 and 11.1 of Section II of the Investment T&Cs) and an additional implied term of reasonable skill and care. While the decision extract provided does not reproduce the full clause-by-clause reasoning, the court’s overall conclusion was that the plaintiff’s contract claims were unsustainable at the pleadings stage. This suggests that the court found either (i) the relevant contractual obligations were not triggered, or (ii) the pleaded breaches did not disclose a coherent contractual duty capable of being breached on the facts as pleaded, or (iii) the implied term analysis could not rescue the claim where the express contractual framework did not support the plaintiff’s theory.
By contrast, the tort claim was treated differently. The court affirmed the Assistant Registrar’s dismissal of the strike-out application as to the tortious claim. This indicates that, even if the contractual route failed, the plaintiff’s tortious allegations were not so clearly doomed that they should be struck out. The court therefore allowed the tort claim to proceed, likely because the pleadings could support a duty of care analysis and, at least at the strike-out stage, the causation allegations were not incapable of being established. The court’s approach reflects the distinction between contractual interpretation (including preconditions and scope of contractual duties) and tortious duties, which may be assessed more flexibly and may depend on factual findings at trial.
What Was the Outcome?
The High Court allowed UBS’s appeal in part. It struck out the plaintiff’s claims premised on the defendant’s alleged breach of contract. The practical effect is that the plaintiff could not pursue recovery on the basis of alleged contractual breaches under the Investment T&Cs (including the pleaded implied term), at least not in the form pleaded.
However, the court affirmed the dismissal of the strike-out application in relation to the tortious claim. The plaintiff’s tort claim therefore remained alive and would proceed to the next procedural stages, subject to further pleadings and eventual determination on the merits, including causation and the standard of care in investment advisory or monitoring.
Why Does This Case Matter?
This case is significant for practitioners because it illustrates how contractual scope and preconditions can be decisive at the pleadings stage. Where a customer’s contractual claims depend on a service being “engaged” (here, the APA Service triggering Section II of the Investment T&Cs), the court may treat that as a threshold issue. If the pleadings cannot realistically establish that the contractual preconditions are met, the contract claim may be struck out even where the underlying investment loss is substantial.
For financial institutions, the decision underscores the importance of clear contractual drafting that delineates when specific obligations apply. The court’s focus on the relationship between the APA Service and the applicability of Section II of the Investment T&Cs demonstrates that banks may successfully resist contract-based claims by pointing to contractual gating mechanisms and the defined scope of monitoring and advisory services.
For claimants and litigators, the decision also highlights strategic pleading considerations. Even if contractual claims are struck out, tort claims may survive. This means plaintiffs may need to plead tortious duties and causation with sufficient particularity to avoid strike-out, while also ensuring that contractual allegations are consistent with the service framework and the documents governing the relationship.
Legislation Referenced
Cases Cited
Source Documents
This article analyses [2022] SGHC 314 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.