Should gill sr be held responsible for this debt

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Reference no: EM134012590

Assignment:

Royal Bank of Canada v. Gill (1988), 47 D.L.R. (4th) 466 (B.C.C.A); 1988 CanLII 2970 (BC CA)

The younger Mr. Gill was fluent in English and a sophisticated businessperson. He had worked in a credit union for a number of years and had managed his father's berry farm. To take advantage of a business opportunity, he arranged with the Royal Bank to borrow $87, 000. During the negotiations, it became clear that he could get a more favourable rate of interest if his father guaranteed the loan. In fact, the son had done a considerable amount of banking on behalf of his father, who was also a customer of the same bank. The elder Gill could not read, write or speak English and relied on his son in all his business dealings. The documents were prepared, and the son brought the father to the bank to sign. At no time did he explain to his father that he was signing a personal guarantee, and the evidence is clear that the father had no idea what he was signing other than that it was a document associated with a loan transaction. Gill, Sr., had implicit faith in his son's handling of his business affairs. Gill, Jr., on the other hand, was so excited about the deal that he apparently never explained the nature of the documents to his father. It is clear in this situation that at no time was there any misrepresentation to the father or the son on the part of the bank. When the son defaulted on the loan, the bank turned to the father for payment.

Should Gill, Sr., be held responsible for this debt? What precautions should the bank have taken? Identify the best arguments of the father. What arguments should the bank advance?

Reference no: EM134012590

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