Jonathan William Glassberg v UBS AG, SINGAPORE BRANCH

Facts

Mr Jonathan William Glassberg, a broker with almost 40 years in banking, held an account with UBS AG, Singapore Branch from 2012, governed by its General Terms. In 2015 he described himself in an investor profile as knowledgeable about investment funds, and in September 2016 he subscribed for a paid advisory service (the APA Service) that gave him access to an investment specialist. His relationship manager, Mr Stephan Freh, was not an investment specialist.

From August 2017 to February 2018 Mr Freh recommended the Direct Lending Income Fund (DLIF), mentioning that a client had introduced it and that he had invested his own money. An e-mail of 18 August 2017 said "This is not a UBS recommendation"; Mr Glassberg accepted receiving it but said he did not read it, and the trial judge found that he had not. Mr Glassberg invested US$1m and then a further US$1.5m. It was undisputed that UBS did no due diligence on the fund. On 22 March 2019 the US SEC charged the fund's manager with fraud, and the fund went into receivership and later liquidation.

Mr Glassberg sued UBS in Suit of 1043 of 2021 for breach of contract, negligence, and vicarious liability for Mr Freh's negligence. The judge dismissed all the claims on 10 January 2025, and he appealed in Civil Appeal No 5 of 2025. The Appellate Division gave an ex tempore judgment.

Issues

1. Whether Mr Freh's recommendation of the DLIF was made under the APA Service so that the APA Terms applied
2. Whether UBS owed Mr Glassberg a duty of care in tort for its investment recommendations, and whether the excluding clauses were fair and reasonable under the Unfair Contract Terms Act 1977
3. Whether UBS was vicariously liable for any negligence of Mr Freh

Holding

The Appellate Division dismissed the appeal in its entirety and upheld the dismissal of all three claims. UBS was awarded costs of the appeal on an indemnity basis fixed at S$65,000 (all-in), with the usual consequential orders.

Reasoning

On contract, Mr Glassberg accepted that his claim failed unless the recommendation fell within the APA Service. The court held it did not. Whether Mr Freh could in theory advise under that service was beside the point; what mattered was whether he actually did. UBS had not told him to advise under the service, nothing showed that the idea came from an investment specialist, and the disclaimer in the August 2017 e-mail was part of the factual matrix, read objectively whether or not Mr Glassberg saw it. The e-mails and calls showed a personal recommendation resting on a client's tip and third parties' checks. That the trades were booked to a portfolio tagged to the service was outweighed by these factors, and Albright & Wilson UK Ltd v Biachem Ltd and others [2002] 2 All ER (Comm) 753 was distinguished on its facts.

On negligence, cl 7.1 of the General Terms, under which the client relies on his own judgment and UBS takes no responsibility for advice, was alone enough to rule out the proximity needed for a duty of care, since it negated voluntary assumption of responsibility and reasonable reliance (Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR(R) 100). The negligence carve-out in cl 5.1 dealt with other conduct. Given his sophistication, his familiarity with such standard clauses, his own business's use of them and his admission that he would have accepted them anyway, the clauses were fair and reasonable. Causation was academic, but the court observed that a 2016 report giving the fund a low rating was out of date, and disagreed with the judge that the manager's fraud, which began in 2014 before the recommendation, was a novus actus interveniens.

The vicarious liability claim failed because cl 5.1 extended UBS's exemptions to its employees, and in any case Mr Freh owed no duty for a personal recommendation.

From the judgment