Norton Motorcycles ex-owner ordered to pay back missing £14m in pensions
The former owner of Norton Motorcycles will be forced to pay back about £14m missing from the company’s employee retirement fund, after being refused permission to appeal against a pensions ombudsman’s ruling.
Stuart Garner, who acquired the classic marque in 2008 and was feted for years by a series of UK government ministers, was told by the regulator in June to refund three retirement funds he controlled as trustee, following an ombudsman ruling that he had acted dishonestly.
The ombudsman’s decision followed an investigation triggered by claims brought by 30 members that Garner had repeatedly failed to return their funds when they were due. The Pension Schemes Act requires trustees to transfer pensions within six months of an application.
The court’s refusal to entertain Garner’s request to appeal is another blow for the businessman, who appears to have been pushed a step closer to personal bankruptcy.
He is already the subject of a personal bankruptcy petition filed by Leicester city council.
The repayment of the £14m to the pension holders, the vast majority of whom were never Norton employees, had been on hold while the court considered Garner’s request for permission to appeal.
In an August order delaying the payment, Mr Justice Fancourt said: “The sum likely to be payable … is extremely large and it is readily understandable that [Garner] will not be able to pay it and that, as a result, he is liable to be made bankrupt.”
In his latest judgment refusing an appeal, however, Fancourt stated: “There could have been no good reason to delay the payment of compensation unless there was compelling evidence that it would be provided by other means within the timescale specified by the ombudsman.”
Garner has been granted permission to appeal against a further £180,000 in distress payments to 30 of the scheme’s 228 members, to whom he had repeatedly failed to return funds when they were due.
The businessman’s law firm said: “Mr Garner has been granted permission to appeal the inconvenience award, and has renewed his application for permission to appeal in respect of the refusal.”
Garner, who was the trustee of three Norton pension funds, invested all of the members’ savings into his own company, but Norton slumped into administration on 29 January.
The ombudsman’s determination in the summer stated: “The trustee has acted dishonestly and in breach of his duty of no conflict, his duty not to profit and his duty to act with prudence.”
The decision followed a Guardian and ITV News investigation in January that showed how 228 “ordinary working people” had had their entire pension pots invested into Norton shares after they had been duped by a fraudster.
Garner received the retirement savings during 2012 and 2013, after a scam that resulted in a promoter, Simon Colfer, being convicted of fraud in 2018 for the way he had sold the scheme.
Two further Garner associates involved in setting up the Norton pensions schemes, Andrew Meeson and Peter Bradley, were convicted of a separate tax fraud in 2013, when they reclaimed £5m of tax rebates from fictitious pension contributions.
Court documents from that trial show that £990,000 of the fraud proceeds were loaned to Garner to acquire Norton in 2008. Garner denies wrongdoing and has said he considers himself a victim because he did not know he was dealing with fraudsters.