This bug was fixed in the package upstart - 1.5-0ubuntu8

---------------
upstart (1.5-0ubuntu8) quantal; urgency=low

  * Merge of latest upstream including doc fixes, fixes for booting
    on initramfs-less systems and improved error handling in spawn
    failure scenarios (LP: #980917, #1032101).
 -- James Hunt <james.h...@ubuntu.com>   Wed, 08 Aug 2012 10:05:34 +0100

** Changed in: upstart (Ubuntu)
       Status: Triaged => Fix Released

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https://bugs.launchpad.net/bugs/980917

Title:
  Failed to create pty - disabling logging for job

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