The High Court's decision in the case of Ramsay v Love may have made certain property portfolio owners sit up and break into a cold sweat, asking 'can I be made liable for a transaction I knew nothing about?'

The case concerned the Camden-based restaurant and bar the York & Albany, leased to one of Gordon Ramsay's companies and was brought by Gordon Ramsay against the freehold owner, actor and film director Gary Love. Mr Ramsay sought a declaration that he was not bound by a guarantee he alleged was unlawfully given in respect of the obligations under the lease by his father-in-law, Christopher Hutcheson through the use of a 'Ghostwriter' machine, which is commonly used by authors to sign books automatically.   

Whilst the court decided that it was unlikely Mr Ramsay knew that the guarantee had been given in his name prior to the grant of the lease, it nevertheless found that he was legally bound by it.  The court reached this decision on the basis that Mr Ramsay had conferred on Mr Hutcheson a wide general authority to enter into business transactions on his behalf, including transactions which imposed personal liability on Mr Ramsay. It reflected on the circumstances leading up to the grant of the lease to Mr Ramsay's company and the significant interest in the property from other prospective operators; interestingly, the court formed the view that given the position of the company looking to take on the lease (and the fact that the company was a relatively new company with little trading history), the landlord's request for a guarantee was entirely understandable and after examining evidence of other similar transactions, found that Mr Ramsay was sufficiently enthusiastic about taking on the premises that he would have offered his personal guarantee if he had been asked to do so.