Ramsay takes on Love and loses

Ref. Gordon James Ramsay v Gary Love [2015]

In one of the most high-profile cases of the year, TV chef Gordon Ramsay was eventually unsuccessful in his proceedings against Mr Gary Love regarding a pub and restaurant in Camden, London – the York & Albany.

In 2008 Gordon Ramsay’s Company, Gordon Ramsay Holdings International Limited, took a lease of the York & Albany Pub and Restaurant in Parkway in Camden Town for a term of 25 years at an initial rent of £640,000 per annum.

The obligations of the Company were reputedly personally guaranteed by Gordon Ramsay himself and it was established that, without this guarantee, the deal would not have gone ahead. The company at the time showed an overall loss of £2.5 million for the year ended 31 August 2005 and net current liabilities of £5.5 million.

Questions arose, however, as to the validity of the personal guarantee. With the business performing poorly, Mr Ramsay sought to unburden himself of the personal guarantee by bringing a case claiming that his signature had been fraudulently used on the guarantee document, without his knowledge.

He alleged that his father-in-law had agreed to give the guarantee without his authorisation and had used a Signature Machine to apply his signature to the Guarantee. He asked the Court to declare he was not bound by the Guarantee.

His father-in-law, Christopher Hutcheson, had run the business for many years before falling out with Mr Ramsay in 2010 when he was accused of serious fraud and was dismissed as Chief Executive. Gordon Ramsay was often abroad and the business typically operated without consulting him on business matters.

In 2007, the Company had bought 2 Ghostwriter Manual Feed Signature Machines which could apply either a felt tip pen, or another pen which gave the appearance of a fine knib having been used, to replicate Ramsay’s signature and save him from personally signing books and photographs or documents and cheques. Gordon Ramsay claimed in 2011 that one of the Machines had been used without his knowledge or authority to sign the Guarantee.

The investment in this venture was loss-making and he was clearly concerned about his liability as a guarantor. His case was that the Guarantee was ineffective as it was not signed by him personally and Mr Hutcheson did not have his authority to give any personal guarantee anyway.

Whilst much of the applicable evidence had reputedly been deleted or lost after the removal of Mr Hutcheson as CEO, the Court found the following to be factual:

• The Machines were used to sign many legal documents. They had been used to append Mr Ramsay’s signature to the Agreement for Lease and the Lease of the premises. It was inaccurate for Mr Ramsay to say that he wasn’t aware of legal documents being signed on his behalf in this way. They were, with some regularity. 

• That said, there was no direct evidence that Mr Ramsay knew he was giving the Guarantee for this particular agreement and no basis to refute his evidence that he did not know one was required. 

• Because of the relatively poor financial position of the Company, it would be typical for its obligations under leases to be guaranteed by Mr Ramsay. 

• Although he played little involvement in the business side of the transaction, Mr Ramsay was evidently keen to acquire these premises for development into a restaurant and a hotel. He was aware of the negotiations for the Lease. 

• The personal guarantee had not been thoughtlessly given by Mr Hutcheson. He had installed a clause which meant that it was possible to limit the guarantee to 2 years rent by providing a rent deposit in place of the guarantee. 

• In the wider context of the business, Ramsay had placed complete trust in Mr Hutcheson and allowed him to deal with corporate and personal matters without any prior consultation or any explanations being provided. He therefore had unlimited general authority to act for the Company and Mr Ramsay in relation to business matters. Mr Ramsay had made clear he had limited business acumen and relied heavily on his father-in-law. 

• If asked, Mr Ramsay would have agreed to give the Guarantee.

In this context, the Court held that Mr Ramsay’s guarantee was good. Though he had not signed the document, and indeed it had been signed without his knowledge and direct approval, it was provided with sufficient authority by Mr Hutcheson, who was in complete control of the business operations at the time. Whether he knew about the decision or not, Mr Ramsey would almost certainly have agreed to the use of his signature if asked.

The result is reputedly a cost to Mr Ramsay of £6.7million relating to the York & Albany lease and £2million in legal expenses.

When asked to comment, Mr Love is reported to have said:

‘I think he was very badly advised, and I hope that both of our families can now put this behind us and get on with our lives. If he rings me up, I will tell him what he needs to do to run the restaurant at a profit. 

‘My solicitor Philip Cohen’s work cracked the case. On the face of it, Ramsay had an open and shut case of his signature being forged on an important legal document. 

‘It was through Philip’s relentless work in dragging out other documents of Ramsay that we were able to show that the signature on the personal guarantee was not a one-off.’

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SJ                                                                                                                                                 29.01.15