Case Details
- Citation: [2025] SGHC 4
- Court: High Court (General Division)
- Suit No: Suit No 1043 of 2021
- Title: Jonathan William Glassberg v UBS AG, Singapore Branch
- Date: Judgment reserved; hearing dates: 9, 10, 13, 15, 16, 28–30 May 2024; 25 September 2024; judgment date: 10 January 2025
- Judges: Wong Li Kok, Alex JC
- Plaintiff/Applicant: Jonathan William Glassberg
- Defendant/Respondent: UBS AG, Singapore Branch
- Legal Areas: Agency; Contract; Unfair Contract Terms; Negligence; Contributory negligence; Vicarious liability
- Statutes Referenced: Unfair Contract Terms Act (UCTA) (as indicated by the judgment headings)
- Cases Cited: Not provided in the supplied extract
- Judgment Length: 41 pages; 11,734 words
Summary
Jonathan William Glassberg v UBS AG, Singapore Branch concerned a private banking dispute arising from a failed investment in the Direct Lending Income Fund (“DLIF”). The plaintiff, an experienced market participant and “knowledgeable investor”, alleged that UBS breached both contractual and tortious duties by failing to warn him that the DLIF was hazardous and high-risk. Central to his case was the role of UBS relationship manager, Mr Stephan Freh, whom the plaintiff said he trusted and relied upon when making investment decisions under UBS’s advisory arrangements.
The High Court analysed the plaintiff’s claims through multiple legal lenses: contractual obligations under the account and investment terms; tortious duty of care in the provision of investment advice; the enforceability of exclusion clauses under the Unfair Contract Terms Act (UCTA); and whether UBS could be held vicariously liable for Mr Freh’s conduct. The court’s reasoning focused on the boundary between what a client may feel is “justice” in light of a relationship manager’s wrongdoing, and what the law actually imposes on a bank that has contractual terms governing the relationship and the scope of liability.
Although the supplied extract truncates the remainder of the judgment, the structure of the issues indicates that the court addressed each of the plaintiff’s routes to liability and also considered causation and contributory negligence. The court ultimately determined the extent (if any) of UBS’s liability for the losses suffered by the plaintiff, including the effect of contractual risk allocation and the legal limits of agency and vicarious liability in a private banking context.
What Were the Facts of This Case?
The plaintiff, Jonathan William Glassberg, had a successful career as a broker and held senior roles in bond trading. He co-founded JB Drax Honore, an exchange-traded interest rate options broker, around 2004. His background was relevant because the court treated him as an individual of means with substantial financial experience, and he later categorised himself as a “knowledgeable investor” in UBS’s investor profile questionnaire.
UBS AG, Singapore Branch, was the defendant and operated as the plaintiff’s private banking provider. The relationship began when the plaintiff was introduced to Mr Freh, who at the time worked with JP Morgan. When Mr Freh moved to UBS, he asked whether the plaintiff would like to move his account to UBS, and the plaintiff agreed. The plaintiff then signed UBS’s Account Opening Form on 21 March 2012. That form incorporated by reference UBS’s General Terms & Conditions (“General T&Cs”) and Investment Services Terms & Conditions (“Investment T&Cs”). The Investment T&Cs were updated in May 2017, and the General T&Cs were updated on 9 October 2017.
From 2012 to 2016, the plaintiff invested approximately £15.6 million with UBS. In September 2016, he subscribed to UBS’s “UBS Advice Premium – Active Portfolio Advisory Service” (“APA Service”), paying a fee for investment advice and monitoring. The APA Service was governed by the Investment T&Cs. The plaintiff’s evidence and the court’s framing show that the plaintiff understood the advisory relationship to involve access to an investment specialist and ongoing advice, but the legal question was whether the specific recommendation at issue fell within the contractual scope of UBS’s advisory obligations.
The dispute crystallised around the DLIF investment. On 18 August 2017, Mr Freh emailed the plaintiff from his UBS email address. The email described the DLIF as a fund focused on write loans to small and medium enterprises and underwriting receivables, stated that UBS gave “40% LV”, and included an attachment described as “straight forward”. Importantly, the email also stated: “This is not a UBS recommendation.” The plaintiff alleged that this communication, together with subsequent communications and phone discussions, resulted in him investing US$1,000,000 and later an additional US$1,500,000 in the DLIF after discussions on 29 November 2017 and 23 February 2018 respectively.
Further context includes that Mr Freh sent additional emails on 3 November 2017 and 29 November 2017, updating the plaintiff on further opportunities for investment in the DLIF, but those later emails did not forward or contain the 18 August 2017 email. On 29 November 2017, the plaintiff and Mr Freh discussed the DLIF by phone, and the plaintiff confirmed by email that he wanted to invest US$1,000,000. On 20 February 2018, Mr Freh emailed investment suggestions including the DLIF, followed by a phone call on 23 February 2018 in which the plaintiff agreed to invest an additional US$1,500,000. Mr Freh left UBS in June 2018.
In February 2019, Mr Freh informed the plaintiff by email that the DLIF had suffered losses to its loan book and that withdrawals were suspended, with a potential loss to the fund of 10–20%. In March 2019, allegations of a multi-year fraud involving the DLIF’s investment manager came to light following a complaint by the US Securities and Exchange Commission against Direct Lending Investments LLC (“DLI”). Reports described DLI’s investments as poorly underwritten, inadequately documented, and inconsistent with representations made to investors. DLI was placed in liquidation. The plaintiff’s position was that his US$2.5 million investment was effectively worthless, subject only to potential recovery from liquidation.
What Were the Key Legal Issues?
The High Court identified multiple issues, reflecting the plaintiff’s multi-pronged claim. First, the court considered whether Mr Freh had actual or ostensible authority to offer the DLIF as an investment to the plaintiff. This issue is foundational because it determines whether UBS can be bound by the relationship manager’s conduct under principles of agency and holding out.
Second, the court examined whether UBS owed contractual obligations to the plaintiff under the investment terms and conditions, particularly whether the recommendation and advice about DLIF fell within the scope of the APA Service and the contractual duty to act diligently and carefully in providing investment advice.
Third, the court addressed whether UBS owed a tortious duty of care to the plaintiff in providing investment advice. This required the court to consider the nature of the relationship, the extent to which trust and reliance were encouraged by UBS, and the standard of care applicable to investment advice in a private banking context. The court also had to consider causation and whether any breach caused the plaintiff’s loss.
Fourth, the court considered the enforceability of exclusion clauses relied upon by UBS under the Unfair Contract Terms Act (UCTA). This issue required the court to analyse whether the exclusion clauses were “unreasonable” within the meaning of UCTA, and whether they could limit or exclude liability for the alleged breaches.
Fifth, the court considered vicarious liability: whether UBS was liable for Mr Freh’s conduct as an employee acting within the course of employment. Finally, the court addressed the scope of the plaintiff’s loss and whether contributory negligence reduced recoverable damages.
How Did the Court Analyse the Issues?
The court’s approach began with the agency question: whether Mr Freh had actual or ostensible authority to offer DLIF. Actual authority focuses on what the principal (UBS) authorised the agent (Mr Freh) to do, while ostensible authority turns on what the principal represented to the third party such that the third party reasonably believed the agent had authority. The court’s issue framing suggests it examined the contractual documents defining Mr Freh’s role as “Client Advisor” (relationship manager), the scope of the APA Service, and the communications between the parties. The presence of the 18 August 2017 email statement “This is not a UBS recommendation” would likely have been significant to the court’s analysis of whether UBS held Mr Freh out as authorised to recommend DLIF as a UBS product or whether the communication was outside UBS’s authorised advisory framework.
On the contractual claims, the court analysed whether UBS owed contractual obligations to provide diligent and careful investment advice and whether the DLIF recommendation was within the contractual scope. The plaintiff’s case was that Mr Freh acted within the scope of the APA Service when he recommended DLIF, thereby engaging UBS’s contractual duty to act diligently and carefully. The defendant’s position, as indicated in the introduction, was that the plaintiff failed to appreciate the nature of the relationship and that the contractual structure placed liability on the plaintiff for investment decisions rather than on UBS for the outcomes of those decisions. The court would have construed the Account Opening Form, the General T&Cs, and the Investment T&Cs, including any provisions governing the extent of advice, the client’s responsibility, and the effect of disclaimers.
Turning to tort, the court considered whether a duty of care arose in negligence in the provision of investment advice. The plaintiff argued that a relationship of trust had been built with Mr Freh, encouraged by UBS, and that UBS failed to meet the standard of care by not properly advising the plaintiff of the risks. The court’s issue framing indicates it assessed whether the relationship and conduct were sufficient to create a duty of care beyond the contractual allocation of risk. In private banking and advisory relationships, courts often scrutinise whether the bank assumed responsibility for the advice such that reliance was reasonable, and whether the alleged omission (failure to warn of risk) is the kind of harm that negligence law addresses in the circumstances.
The analysis of exclusion clauses under UCTA formed another major pillar. Even if contractual or tortious duties were established, exclusion clauses can limit liability. The court’s issue framing indicates it examined whether the clauses relied upon by UBS were unreasonable under UCTA. This requires a structured evaluation of the clause’s effect, the bargaining positions of the parties, and whether the clause undermines the statutory policy against unfair exclusion of liability. In financial services contexts, courts also consider the clarity and prominence of disclaimers, the client’s sophistication, and the extent to which the client was informed of limitations on reliance.
On vicarious liability, the court considered whether UBS was liable for Mr Freh’s conduct. Vicarious liability depends on whether the employee’s wrongful act was sufficiently connected to the employment—often described as being within the course of employment or closely related to the employee’s duties. The plaintiff’s alternative argument was that even if DLIF was not recommended by UBS itself, it was recommended by Mr Freh in his capacity as UBS’s employee, and UBS should therefore be vicariously liable. The court would have assessed the nature of Mr Freh’s role, the advisory framework, and whether recommending DLIF was part of the functions he was employed to perform or whether it was a personal or unauthorised venture.
Finally, the court addressed causation, the scope of loss, and contributory negligence. The plaintiff sought damages of US$2.5 million (or damages to be assessed), plus interest and costs. The defendant’s likely response included arguments that the plaintiff’s own investment decisions were independent, that any alleged failure to warn did not cause the loss, and that the plaintiff’s conduct contributed to the loss. The issue framing indicates the court considered contributory negligence and adjusted damages accordingly if appropriate.
What Was the Outcome?
Based on the judgment’s structured resolution of Issues 1 to 6, the court determined the legal boundaries of UBS’s responsibility for the DLIF losses. The outcome would have turned on findings regarding (i) whether Mr Freh had authority to recommend DLIF, (ii) whether UBS owed contractual and/or tortious duties in respect of that recommendation, (iii) whether exclusion clauses could validly limit liability under UCTA, and (iv) whether vicarious liability applied. The court also assessed the extent of recoverable loss and whether contributory negligence reduced any damages.
While the supplied extract does not include the final orders, the overall framing—particularly the court’s emphasis on the “boundary between the plaintiff’s search for justice” and “the reality of the legal position” when entering the banking relationship—suggests that the plaintiff’s claims faced significant legal obstacles arising from contractual risk allocation, limitations on reliance, and the legal limits of agency and vicarious liability.
Why Does This Case Matter?
This case is significant for practitioners because it illustrates how Singapore courts approach disputes in private banking relationships where a client alleges betrayal of trust by a relationship manager. The judgment’s multi-issue structure shows that courts will not treat the existence of a relationship manager’s wrongdoing as automatically translating into liability for the bank. Instead, liability must be grounded in established legal doctrines: contractual scope, tortious duty of care, agency authority, and vicarious liability principles.
For contract and financial services lawyers, the case also highlights the practical importance of contractual documentation, including account opening forms, general terms, investment terms, and investor profile questionnaires. Where the client is sophisticated and the contract allocates responsibility for investment decisions, the court may be reluctant to impose additional tortious duties that effectively rewrite the parties’ risk allocation. The UCTA analysis further underscores that exclusion clauses can be decisive, subject to reasonableness scrutiny.
For litigators, the case provides a useful framework for pleading and proving causation and reliance in investment advice claims. Even where a duty is alleged, the plaintiff must show that the breach caused the loss, and the court may reduce damages for contributory negligence where the plaintiff’s own conduct contributed to the investment outcome. The decision therefore serves as a reminder that successful claims in this area require careful alignment between the factual narrative (what was said, by whom, and in what capacity) and the legal theory (authority, duty, exclusion, and causation).
Legislation Referenced
Cases Cited
- Not provided in the supplied extract
Source Documents
This article analyses [2025] SGHC 4 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.