In the case of Ramsay v Love the following facts were heard.
In February 2008, Northam Worldwide Ltd (Northam) granted a lease of premises to Gordon Ramsay Holdings International Ltd (GRHI). The terms of the lease provided for the obligations of the lessee to be guaranteed by Gordon Ramsay Holdings Ltd (GRH) and by Gordon Ramsay himself (R). Much of R's business was dealt with by H (R's father in law and a director of GRHI). On completion, Northam as the lessor was provided with the counterpart lease. The counterpart appeared to have been duly signed by R. Following the grant of the lease, the lessee commenced to fit out the premises and eventually began to trade from the premises as a restaurant and a small hotel. In July 2011, L became entitled to acquire the reversion on the lease and, in November 2012, the reversion was assigned by Northam to L. In September 2011, R told L that he was not bound by the guarantee apparently signed by him. A dispute arose between R and H. R brought proceedings against L.
The issue was whether R was bound by the guarantee apparently given by him. He submitted that he was not, because he had not signed the counterpart lease. His signature had been placed on the document by a signature machine, operated by H. It was accepted that, had the machine been operated by R, the signature would have been valid. That raised the question of whether: (i) R had known about the guarantee; and (ii) H had had the authority to commit R to the guarantee.
The court ruled:
On the evidence, it had not been proven on the balance of probabilities that R had known about the guarantee. However, when H had committed R to the guarantee, he had been acting within the wide general authority conferred on him by R. That authority had included H offering, on behalf of R, R's guarantee in relation to a lease when the business required it. While R might regret the deal, he was not able to say that H had exceeded his authority in any respect.
R, acting through his agent H, was bound by the guarantee in the lease of the premises
Published on 13/02/2015