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 Number: Suit No 1043 of 2021
- Registrar’s Appeal: Registrar’s Appeal No 275 of 2022
- Plaintiff/Applicant: Jonathan William Glassberg
- Defendant/Respondent: UBS AG, Singapore Branch
- Procedural History: The defendant applied to strike out the entirety of the plaintiff’s claims (HC/SUM 1706/2022). The Assistant Registrar dismissed the application. The defendant appealed (HC/RA 275/2022), which was allowed in part. The High Court now provides full written grounds.
- Hearing Dates: 10 and 13 October 2022 (oral remarks delivered on 13 October 2022)
- Length of Judgment: 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: Contractual interpretation of investment terms; whether an “APA Service” was engaged; estoppel; implied terms in investment advisory/monitoring; tortious duty of care; causation; striking out under O 18 r 19 of the Rules of Court.
Summary
In Glassberg v UBS AG, Singapore Branch [2022] SGHC 314, the High Court considered an application to strike out a customer’s claims against a bank arising from losses sustained after investing in the Direct Lending Income Fund (“DLIF”). The plaintiff, Jonathan William Glassberg, alleged both contractual and tortious breaches by UBS in connection with investment advisory and monitoring services. The defendant bank applied to strike out the entirety of the claims under O 18 r 19(1) of the Rules of Court, arguing that the claims were legally and factually unsustainable and, in any event, that the bank 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-based claims premised on alleged breaches of contractual duties under the bank’s Investment Terms & Conditions (“Investment T&Cs”), because the pleaded case did not establish that the relevant service framework (the “APA Service”) had been engaged such that the specific contractual provisions relied upon could apply. However, the court affirmed the Assistant Registrar’s decision to dismiss the striking-out application in respect of the plaintiff’s tortious claim. In other words, while the contractual route failed at the pleading stage, the tort claim was allowed to proceed.
What Were the Facts of This Case?
The plaintiff opened an account with UBS in April 2012. A UBS employee, Mr Stephan Freh, was appointed as the plaintiff’s client advisor. In that role, Mr Freh provided investment advice and recommendations from time to time. In September 2016, the plaintiff subscribed to UBS’s “UBS Advice Premium – Active Portfolio Advisory Service” (“APA Service”). The plaintiff later terminated the APA Service in May 2018. The APA Service was described as providing clients with direct access to an investment specialist who would render investment advice and monitor clients’ assets falling within the bank’s “investment universe”.
After subscribing to the APA Service, the relationship between the parties was governed by three documents: (a) the Account Opening Form dated 21 March 2012; (b) the General Terms & Conditions (“General T&Cs”); and (c) the Investment Services Terms & Conditions (“Investment T&Cs”). Critically, the Investment T&Cs contained a structure in which Section II applied only when the APA Service had been engaged. The court treated this as a central contractual gating mechanism: if the APA Service was not engaged, only the General T&Cs would apply; if it was engaged, Section II of the Investment T&Cs would supplement the General T&Cs.
The plaintiff’s losses arose from investments in the DLIF. Between 18 August 2017 and 23 February 2018, Mr Freh communicated with the plaintiff by email and phone regarding investments in the DLIF. The DLIF fact sheet, first sent by email on 18 August 2017, described the fund as a financier of non-bank lenders seeking to benefit from a “regulatory premium” created by 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 a potential investment, while also stating in at least one email that the DLIF was “not a UBS recommendation”. Mr Freh explained that he had been introduced to the DLIF by another client and that he had personally invested. The plaintiff was provided with fact sheets containing risk disclosures. Later emails included investment suggestions referencing the DLIF, and phone calls included statements emphasising Mr Freh’s personal conviction and the due diligence of other family offices. In 2019, allegations emerged of a multi-year fraud by the DLIF’s investment adviser/manager, DLI, and its CEO. The US Securities and Exchange Commission brought proceedings, DLI was placed into liquidation, and the plaintiff lost his DLIF investment, prompting the present suit.
What Were the Key Legal Issues?
The High Court identified several issues relevant to whether the plaintiff’s claims should survive a striking-out application. The central contractual question was whether the APA Service had to be provided by “investment specialists” of UBS, and whether the plaintiff’s pleaded case could establish that the APA Service was engaged in relation to the DLIF investment. This mattered because the plaintiff’s contract claims relied principally on clauses in Section II of the Investment T&Cs, which the defendant argued were inapplicable unless the APA Service was engaged.
A second contractual issue concerned estoppel. The plaintiff argued that the defendant was estopped from asserting that the DLIF was not within the defendant’s “investment universe” (and therefore not subject to monitoring under the APA Service framework). This raised the question whether the defendant’s earlier conduct or representations could prevent it from denying the applicability of the relevant contractual monitoring regime.
Beyond contract, the plaintiff also pleaded a tortious duty claim. The court had to consider whether the bank owed the plaintiff a duty of care in rendering investment advisory or monitoring services, and whether causation was sufficiently pleaded. While the High Court ultimately allowed the tort claim to proceed, causation remained a live issue in the striking-out analysis.
How Did the Court Analyse the Issues?
The court approached the striking-out application by focusing on the pleading framework under O 18 r 19(1). The test is whether the claim is obviously unsustainable and should not proceed to trial because it is bound to fail. In this case, the defendant’s application targeted both the contractual and tortious claims, but the High Court’s written reasons show a more granular assessment: the contract claims were struck out, while the tort claim was not.
On the contract claims, the court treated the contractual architecture of the Investment T&Cs as decisive. Section II of the Investment T&Cs applied only when the APA Service had been engaged. 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 the DLIF was outside the bank’s investment universe and not subject to monitoring. The plaintiff’s position was the opposite: that the APA Service had been engaged and therefore Section II applied, even if the DLIF was not within the investment universe as characterised by the defendant.
The High Court’s analysis turned on whether the plaintiff’s pleaded case could plausibly establish the contractual precondition for Section II. The court’s reasoning, as reflected in the outcome, indicates that the plaintiff’s pleadings did not clear the threshold required to show that the APA Service was engaged in a manner that triggered the specific contractual duties relied upon. Put simply, the plaintiff’s contract claims were premised on clauses that were contractually contingent. If the contingency was not pleaded in a way that could be accepted as arguable, the contractual route could not survive.
The court also addressed the implied term argument. The plaintiff pleaded an additional implied term requiring the bank to exercise reasonable skill and care in rendering investment advisory or monitoring services. While implied terms can sometimes be recognised where they are necessary to give business efficacy or reflect the parties’ presumed intentions, the court’s striking-out decision suggests that the implied term could not be used to bypass the contractual gating mechanism that determined which service framework applied. In other words, the implied term could not rescue a claim that depended on the applicability of Section II duties that were not properly engaged on the pleaded facts.
On estoppel, the plaintiff sought to prevent the defendant from denying that the DLIF was within the investment universe. However, estoppel requires a clear factual foundation: reliance on representations or conduct, and detriment or a sufficiently pleaded basis for the defendant to be precluded from resiling. The court’s decision to strike out the contract claims indicates that, even if the plaintiff alleged conduct by the bank, the pleaded estoppel case could not overcome the threshold issue of contractual applicability to the APA Service framework relied upon.
As for the tort claim, the court affirmed the Assistant Registrar’s dismissal of the striking-out application. This indicates that, unlike the contract claims, the tortious duty and causation issues were not so obviously unsustainable at the pleading stage. The court therefore allowed the tort claim to proceed, reflecting the principle that striking out is a draconian remedy and should not be used to resolve contested factual matters or nuanced legal questions prematurely. The court’s approach suggests that while the contractual duties were contingent and failed at the pleading threshold, the tortious claim raised arguable issues about the bank’s conduct in providing investment advice and whether it could be characterised as giving rise to a duty of care.
What Was the Outcome?
The High Court allowed the defendant’s appeal in part. The court struck out the plaintiff’s claims premised on the defendant’s alleged breach of contract. This means that the contractual causes of action—both those based on express clauses in Section II of the Investment T&Cs and those based on an implied term—did not survive the striking-out application.
For the avoidance of doubt, the court affirmed the Assistant Registrar’s decision to dismiss the striking-out application as it related to the plaintiff’s tortious claim. The practical effect is that the plaintiff’s case could continue on a tort basis, but not on the contractual basis. The decision therefore narrows the litigation and channels the dispute toward issues of duty of care and causation rather than contractual interpretation of the Investment T&Cs.
Why Does This Case Matter?
This case is significant for practitioners because it illustrates how contractual “gating” provisions can defeat contract claims at the pleading stage. Where a bank’s terms make certain duties contingent on the engagement of a particular service (here, the APA Service and the applicability of Section II of the Investment T&Cs), a plaintiff must plead facts that plausibly bring the case within the contingency. Otherwise, the claim may be struck out as unsustainable under O 18 r 19(1).
From a civil procedure perspective, Glassberg also demonstrates the court’s willingness to grant partial striking-out relief. Even where a defendant seeks to strike out the entirety of a claim, the court may separate contract and tort issues and apply different thresholds. The affirmation of the tort claim underscores that striking out should not be used to decide contested factual questions or to foreclose arguable legal routes prematurely.
For banks and financial institutions, the decision highlights the importance of clear contractual drafting and the strategic value of pointing to service-specific applicability clauses. For claimants, it underscores the need for careful pleading: where contractual duties are conditional, the pleading must address those conditions directly, including the factual basis for service engagement and the relevance of the investment universe or monitoring framework. For law students, the case is a useful study in the interaction between contractual interpretation and the procedural mechanism of striking out.
Legislation Referenced
- Rules of Court (Cap 322, R 5, 2014 Rev Ed) — O 18 r 19(1)(a), (b), (c) and (d)
- Unfair Contract Terms Act (including references to the Unfair Contract Terms Act 1977)
Cases Cited
- [2015] SGHC 52
- [2020] SGHC 104
- [2022] SGHC 314
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.