Court finds no breach when advisor didn’t “sell in May and go away”

By James Langton | September 17, 2021 | Last updated on September 17, 2021
3 min read

An investment advisor who didn’t follow a client’s vague instruction to sell everything to enact a “sell in May and go away” strategy didn’t breach his duty to that client, a British Columbia court has ruled.

The Supreme Court of B.C. found that an investor was mistaken when he thought he could simply tell his advisor to “do the best he could” and liquidate his portfolio.

“While an advisor is required to follow the directions of a client those directions must be consistent with the contract in place. An advisor cannot execute an instruction unauthorized by the agreement between his firm and the client,” Justice Steeves wrote in Miller v RBC Dominion Securities Inc.

The conclusion came in a lawsuit between an investor, Raymond Miller, and an advisor, Bruce Crowle, and Crowle’s firm, RBC Dominion Securities Inc.

According to the court decision, Miller sued Crowle and DS, claiming “negligence and breach of contract for losses they attribute to investments they made with the defendants.”

Miller alleged that he suffered losses when his advisor didn’t follow his instructions to employ a “sell in May and go away” strategy that Miller heard about on TV.

In the spring of 2013, and again in 2015, Miller raised the idea of selling everything, yet the advisor didn’t follow through, the suit noted.

However, the court found neither the firm nor the advisor did anything wrong in failing to act on those instructions.

“[I]t is clear that Mr. Miller mistakenly believed he could simply give a general direction to Mr. Crowle who would do the best he could,” Justice Steeves wrote, ruling that there was no breach of duty or breach of care by the defendants.

The court noted that Miller’s DS account was an advisory account, not a discretionary account.

“As a result of the advisory nature of the contract between the parties Mr. Crowle could not exercise that level of discretion (and he was not qualified to do so),” the decision said.

While the court dismissed various other claims made by the plaintiffs, it did find that there was breach of the duty of care by the defendants when they changed the risk ratings on the investor’s portfolios in know-your-client documentation that ultimately resulted in the accounts being rated as 100% high-risk.

However, the court wasn’t able to assess what, if any, losses were sustained a result of that breach. Further, neither side had prepared evidence on that specific issue.

“Since they could not know the result of this judgment the parties did not prepare submissions on the narrow causation/damages issue: what were the damages (if any) caused by the defendants’ failure to obtain the prior, express instructions of the plaintiff to significantly change the risk rating of their portfolios in 2013 and 2015?”

As a result, the court called on both sides to make further submissions on damages.

“I am very reluctant to reopen any issue in this protracted litigation but I find I have no choice but to do so in order to address the relatively narrow issue of damages I have identified. I emphasize that I have made no decision on any amount of damages,” Justice Steeves wrote.

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.