Case Update: Ramsay v Love

In the recent case of Ramsay v Love [2015] EWHC 65 (Ch), the celebrity chef Gordon Ramsay was found to be bound by a personal guarantee given to a landlord, even though he had not physically signed the guarantee document.

Background

A lease over a prominent building near Regent's Park which now contains the York and Albany restaurant and hotel was granted to Gordon Ramsay Holdings International Ltd (GRHI) in February 2008. The lease was for 25 years and the yearly rent was set at £640,000 per year with an upwards only rent review every 5 years during the term. The lease was guaranteed by Gordon Ramsay Holdings (GRH) and Mr Ramsay personally. Mr Ramsay's signature was written on the counterpart lease by an automatic signature machine. The machine was kept at the offices of GRH. Mr Ramsey's father- in-law, Mr Christopher Hutcheson, was the Chief Executive Officer of GRH.

In relation to the lease and the guarantee, both GRHI and GRH accepted that they were bound as lessee and guarantor respectively. However, in September 2011, Mr Ramsay stated that he was not bound by the guarantee. Mr Ramsay's position was that he should not be bound as he did not sign the deed—his signature had been placed on the document by Mr Hutcheson, through use of the signature machine, without authority from Mr Ramsay.

Can a ghost signature be effective?

This question was not raised by either party before the court, but the judge chose to address it despite this, for the avoidance of doubt. Both parties accepted that if Mr Ramsay had operated the signature machine, the signature would have been effective. It was also accepted by both the claimant and defendant that if Mr Ramsay had expressly authorised another person to operate the signature machine, then the deed would have been effectively signed by Mr Ramsay. The judge referred to Firstpost Homes Ltd v Johnson [1995] 4 All ER 355 where it was suggested a document could only be 'signed' by an executing party and that such 'signing' must be with a pen in his own hands. The presiding judge found that Firstpost was not authority as regards the permissibility of signing machines being used.

Guarantee or indemnity?

Mr Ramsay's counsel had initially raised, as a side issue, the question of whether the guarantee in question was a guarantee or an indemnity. If a document constitutes a guarantee, the provisions set out in section 4 of the Statute of Frauds Act 1677 (the Act) apply. This states that a guarantee must be...