ON APPEAL FROM WALSALL COUNTY COURT
HIS HONOUR JUDGE GREGORY
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE RICHARDS
LORD JUSTICE TOMLINSON
| Sean Robert Delaney
|- and -
|(1) Shane Pickett
(2) Tradewise Insurance Services Limited
William Featherby QC (instructed by Browne Jacobson LLP) for the respondents
Hearing date: 30th June 2011
Crown Copyright ©
LORD JUSTICE WARD:
"64. As I have already found as a fact the purpose of the journey in this case was the collection and transportation of illegal drugs for subsequent re-sale. It follows in my judgment that the Claimant's action arises directly ex turpi causa and for that reason must fail. Alternatively in my judgment the conduct upon which the Claimant was engaged in concert with the first Defendant was sufficiently anti-social that public policy prevents him from pursuing a claim arising out of it."
As against the insurers, he found that liability was excluded under the clause 6(1)(e)(iii) of the Motor Insurers' Bureau Agreement because the vehicle was being driven in the course or in furtherance of crime. However, Judge Gregory himself gave permission to appeal for this Court to consider both the extent of the ex turpi causa defence and the proper interpretation of the Agreement .
"Had I found for the claimant against the first defendant then I would have rejected the allegation of contributory negligence against him because there is no direct evidence to establish that the claimant knew or ought to have known that he was under the influence of cannabis even if he was. The evidence does not establish that the cannabis consumed by the first defendant would probably have had a visible effect upon him nor that the fact of his consumption of it would have been otherwise apparent to the claimant through smell or manner of speech or otherwise. While all of these matters might have been the case the evidence is not such as to establish upon the balance of probabilities that any of them was in fact so."
"He made admissions and gave an account of how and why he had come into possession of drugs."
In my judgment it will, however, be necessary to see what explanation was given in order to test the probabilities if his assertions could have been true.
"47. It follows that I find as a fact upon the balance of probabilities that the claimant placed it there himself.
48. I also find that the claimant knew what the parcel contained. He made it plain in the course of his evidence that he was familiar with cannabis and would recognise its smell. Mr Brindley referred to there being a very distinctive herbal small emanating from the bag, particularly once removed from under the claimant's coat. If as I have found the claimant did place the cannabis under his coat then it follows he did so some time before the accident. Given how long he had been in the car at the time of the accident and its position relative to his home when the incident occurred, I am also satisfied and find as a fact that he did so at some time after he left his own home and got into the first defendant's car.
49. I am therefore satisfied and find as a fact that the Claimant placed the cannabis under his coat in order to hide it because he was well aware that it was in fact cannabis and a very large quantity of that illegal drug."
There is now no challenge to those findings.
The disputed findings of the judge
"50. The quantity involved was far in excess of the amount required for personal use even by a heavy user. To buy the cannabis would have cost something between £500 and £1000. This would have been a significant investment for either the claimant on £14,000 per annum gross or the first defendant who was off work sick. The first defendant of course, had a much smaller quantity of cannabis secreted down his sock. The inference in my view is obvious. That quantity was for his personal use while the larger quantity was intended for re-sale, that is for dealing. How precisely that was to be achieved it is impossible to say but I am satisfied and find as a fact that on the balance of probabilities it was the joint intention of the claimant and the first defendant that the larger quantity of cannabis should subsequently be sold on.
51. The next matter to consider is the role of the car in the context of the cannabis hidden upon the claimant. Specifically whether the fact that the claimant and the first defendant were travelling together in a motor car was merely incidental to their possession of the cannabis or whether that was the dominant purpose of the journey and the use of the car upon which they were engaged at the time of the accident.
52. The claimant's case is of course that the first defendant turned up at his home out of the blue to take him for a test drive in his recently acquired car. It was of course dark, being 6.20 pm in late November and it was a Saturday night. Had they been engaged upon a simple short test drive then that could have been accomplished within 10 minutes or so. But the accident occurred some 40 minutes after they left the claimant's home when they were driving towards it at high speed. Given that the first defendant had already acquired the car there was no obvious point in the claimant participating in a road test of it.
53. Consideration of this matter is in my view bound up with the consideration of when the cannabis was obtained. If the first defendant had already acquired the cannabis would he have stopped off from wherever he was going with it to take the claimant, merely an acquaintance who he had not seen for the best part of a year for a test drive in the dark? The suggestion is in my judgment unrealistic. It is also inconsistent with the claimant's subsequent conduct in secreting the cannabis underneath his coat. That in my judgment indicates presence at the time of acquisition.
54. It is also in my view quite unreal to suggest that having collected the claimant for a ten minute test drive the first defendant happened to take him upon a 30 minute journey in the course of which he happened to acquire the cannabis without reference to him.
55. I reject Mrs Delaney's evidence that the claimant was due back within 10 minutes. It is in my view inconsistent with her failure to make any attempts to contact him or to make any enquiry as to his whereabouts for the three hours or so that he was overdue. Nor of course did the Claimant attempt to contact his wife to let her know that he would be home once he was overdue.
56. Mrs Delaney may have hoped that the Claimant would not be gone long but she plainly had no concern when he was.
57. The only sensible alternative explanation for the first defendant calling to collect the claimant was that they intended to travel together to acquire a sufficient quantity of cannabis for subsequent resale. That in my view is overwhelmingly more likely than the claimed spontaneous test drive. Adopting the approach that the matter is for the defendant to prove on the balance of probabilities I therefore find as a fact that the purpose of the journey upon which the claimant and the first defendant embarked was the transportation of illegal drugs, namely cannabis. Whilst it is possible that the first defendant had collected the cannabis before he picked up the claimant, I consider it more likely that the drugs were collected after he had done so, given the direction in which they were travelling at the time of the accident and the fact that the larger quantity of cannabis was secreted upon the person of the claimant. Given the quantity of that cannabis I am satisfied that the intended purpose for it was subsequent resale in one form or another. I am satisfied and find as a fact that the claimant and the first defendant were acting in concert in a joint enterprise for illegal purposes."
The challenge to those findings
(a) that he was in possession of the package stuffed up inside his jacket;
(b) that he knew it contained cannabis; and
(c) that he placed it there after he got into the car.
Because, as the judge accepted, he had no memory of the events of that evening, the appellant could give no explanation for his action.
"The quantity involved was far in excess of the amount required for personal use," the emphasis being added by me.
There is no evidence to support that finding. The only evidence touching on this subject was contained in one of the statements before the court from a detective constable experienced in drug trafficking offences. It was he who said the amount of cannabis would produce 1370 cigarettes and that smoking 20 cigarettes a day, which would amount to heavy use, would mean that the two amounts would together last for 68.5 days. He expressed no opinion as to whether that quantity was excessive, never mind "far in excess" of the amount required for personal use. He said nothing to suggest that keeping the cannabis in a Tupperware tub for personal use was a fanciful possibility. Whether what Pickett said in his statement to the police was true or not, the account given by him was not so fanciful or inherently improbable that it should not have been used in considering where the balance of probability lay. The case advanced by the insurers was conjecture; Pickett's story was another tenable explanation: the issue is whether one is more probable than the other.
The ex turpi causa non oritur actio/public policy defence
"The difficulty that I perceive with the argument of Mr Wood QC is that it would equally apply to two men actively engaged in the commercial dealing of illegal drugs from a motor car at street level. Having tried a number of such cases in the Crown Court it is within the court's knowledge that such dealing is typically carried out by collecting a customer from a pre-arranged location, driving off with him in the car, conducting the transaction in the car and then dropping him a few hundred yards or so away. Typically two men act together, one as driver whilst the other as passenger conducts the transaction. The whole process is then repeated with another customer. In such circumstances it is plainly in the interests of the driver, passenger and customer that the motor car should be driven appropriately and carefully. Yet I am satisfied that if in such circumstances a driver were to injure his passenger through negligent driving, the passenger would not be able to recover in an action for damages for personal injuries because as stated by Dillon LJ (above) the claim would have arisen "directly ex turpi causa"."
Although the judge had already found at  that it was impossible to say how they intended to deal with the cannabis, he now seems to be attributing this course of conduct to them. Accordingly the judge concluded in paragraph  of his judgment set out at  above that the claimant's action arose directly out of the wrongdoing which was sufficiently anti-social that public policy prevented the claim being made.
"Thus on the findings made by the judge in this case I would hold that the plaintiff is precluded on grounds of public policy from recovering compensation for the injuries which he sustained in the course of the very serious offences in which he was participating."
Balcombe L.J. applied the approach of the High Court of Australia which asked, where there was a joint criminal enterprise, how could a standard of care be determined for such a course of criminal activity? He held at p.50F-G:
"This approach seems to me to enable the court to differentiate between those joint enterprises which, although involving a contravention of the criminal law and hence illegal - e.g., the use of a car by an unlicensed and disqualified driver as in Jackson v Harrison (138 C.L.R. 438) - are not such as to disable the court from determining the standard of care to be observed, and those, such as the use of a getaway car as in Ashton v Turner  Q.B. 137 where it is impossible to determine the appropriate standard of care."
Dillon L.J. relied on the judgment of Bingham L.J. in Saunders v Edwards  1 W.L.R. 116, 1134:
" I think that on the whole the courts have tended to adopt a pragmatic approach to these problems, seeking where possible to see that genuine wrongs are righted so long as the court does not thereby promote or countenance a nefarious object or bargain which it is bound to condemn. Where the plaintiff's action in truth arises directly ex turpi causa, he is likely to fail Where the plaintiff has suffered a genuine wrong, to which allegedly unlawful conduct is incidental, he is likely to succeed "
Dillon L.J. said at p. 56F-G:
"Bingham L.J.'s dichotomy in Saunders v Edwards  1 W.L.R. 1116 between cases where the plaintiff's action in truth arises directly ex turpi causa and cases where the plaintiff has suffered a genuine wrong to which allegedly unlawful conduct is incidental avoids this difficulty [of formulating a criterion which would separate cases of serious illegality from those which are not serious], in that it does not involve grading illegalities according to moral turpitude."
"The maxim ex turpi causa expresses not so much a principle as a policy. Furthermore, that policy is not based upon a single justification but on a group of reasons, which vary in different situations."
"The operation of the principle arises where the claimant's claim is founded upon his own criminal or immoral act. The facts which give rise to the claim must be inextricably linked with the criminal activity. It is not sufficient if the criminal activity merely gives occasion for tortious conduct of the defendant."
Lord Hoffmann continued:
"This distinction, between causing something and merely providing the occasion for someone else to cause something, is one with which we are very familiar in the law of torts. It is the same principle by which the law normally holds that even though damage would not have occurred but for a tortious act, the defendant is not liable if the immediate cause was the deliberate act of another individual. Examples of cases falling on one side of the line or the other are given in the judgment of Judge LJ in Cross v Kirby  CA Transcript No 321. It was Judge LJ, at para 103, who formulated the test of "inextricably linked" which was afterwards adopted by Sir Murray Stuart-Smith LJ in Vellino v Chief Constable of the Greater Manchester Police  1 WLR 218. Other expressions which he approved, at paras 100 and 104, were "an integral part or a necessarily direct consequence" of the unlawful act (Rougier J: see Revill v Newbery  QB 567, 571,  1 All ER 291,  2 WLR 239) and "arises directly ex turpi causa": Bingham LJ in Saunders v Edwards  2 All ER 651,  1 WLR 1116, 1134. It might be better to avoid metaphors like "inextricably linked" or "integral part" and to treat the question as simply one of causation. Can one say that, although the damage would not have happened but for the tortious conduct of the defendant, it was caused by the criminal act of the claimant? (Vellino v Chief Constable of the Greater Manchester Police  1 WLR 218). Or is the position that although the damage would not have happened without the criminal act of the claimant, it was caused by the tortious act of the defendant? (Revill v Newbery  QB 567."
Clause 6(1)(e)(iii) of the Motor Insurers' Bureau (MIB Agreement)
"5. (1) Subject to clauses 6 to 17, if a claimant has obtained against any person in a Court in Great Britain a judgment which is an unsatisfied judgment then MIB will pay the relevant sum to, or to the satisfaction of, the claimant or will cause the same to be so paid.
(2) Paragraph (1) applies whether or not the person liable to satisfy the judgment is in fact covered by a contract of insurance and whatever may be the cause of his failure to satisfy the judgment."
There are, however, exceptions to the agreement of which clause 6 is relevant:
"6. (1) Clause 5 does not apply in the case of an application made in respect of a claim of any of the following descriptions (and, where part only of a claim satisfies such a description, clause 5 does not apply to that part) -
(e) a claim which is made in respect of a relevant liability described in paragraph (2) by a claimant who, at the time of the use giving rise to the relevant liability was voluntarily allowing himself to be carried in the vehicle and, either before the commencement of his journey in the vehicle or after such commencement if he could reasonably be expected to have alighted from it, knew or ought to have known that -
(i) the vehicle had been stolen or unlawfully taken;
(ii) the vehicle was being used without there being in force in relation to its use such a contract of insurance as would comply with Part VI of the 1988 Act;
(iii) the vehicle was being used in the course or furtherance of a crime; or
(iv) the vehicle was being used as a means of escape from, or avoidance of, lawful apprehension.
(2) The relevant liability referred to in paragraph (1)(e) is a liability incurred by the owner or registered keeper or a person using the vehicle in which the claimant was being carried."
"However, Member States may exclude the payment of compensation by that body in respect of persons who voluntarily enter the vehicle which caused the damage or injury when the body can prove that they knew it was uninsured."
It will be seen at once that this exception is much narrower than the exceptions provided for in the agreement itself. Three of the four exceptions provided in clause 6(1)(e) are not required by the directive, namely, (i) the vehicle being stolen, (iii) the vehicle being used in the course of or in furtherance of crime and (iv) the vehicle being used in escaping from or avoiding arrest.
"27. It is thus clear that the Community legislature's intention was to entitle victims of damage or injury caused by unidentified or insufficiently insured vehicles to protection equivalent to, and as effective as, that available to persons injured by identified and insured vehicles.
34. The fact that the source of the obligation of the body in question lies in an agreement concluded between it and a public authority is immaterial, provided that that agreement is interpreted and applied as obliging that body to provide victims with the compensation guaranteed to them by the Second Directive and as enabling victims to address themselves directly to the body responsible for providing such compensation."
"10. When interpreting any document it is always important to identify, if possible, the purpose the provision was intended to achieve. This makes it necessary, in the present case, to go to the Second EEC Motor Insurance Directive 84/5/EEC, of 30 December 1983, on the approximation of the laws of the member states relating to insurance against civil liability in respect of the use of motor vehicles. It is necessary to do so because the purpose of the 1988 MIB agreement was to give effect to the terms of this Directive.
11. The main purpose of the Directive was to improve guarantees of compensation for victims of motor accidents by ensuring a minimum level of protection for them throughout the Community.
13. What is meant by 'knew' in the context of the Directive? The interpretation of the Directive is a matter governed by Community law.
14. The context is an exception to a general rule. The Court of Justice has stressed repeatedly that exceptions are to be construed strictly. Here, a strict and narrow interpretation of what constitutes knowledge for the purpose of article 1 is reinforced by the subject matter. The subject matter is compensation for damage to property or personal injuries caused by vehicles. The general rule is that victims of accidents should have the benefit of protection up to specified minimum amounts, whether or not the vehicle which caused the damage was insured. The exception, therefore, permits a member state, contrary to the general rule, to make no provision for compensation for a person who has suffered personal injury or damage to property. Proportionality requires that a high degree of personal fault must exist before it would be right for an injured passenger to be deprived of compensation. A narrow approach is further supported by the other prescribed limitation on the permissible ambit of any exclusion: the person claiming compensation must have entered the vehicle voluntarily. The need for the passenger to have entered the vehicle voluntarily serves to confirm that the exception is aimed at persons who were consciously colluding in the use of an uninsured vehicle. And it can be noted that the Directive emphasises the exceptional nature of the exclusion of compensation by placing the burden of proving knowledge on the party who seeks to invoke the exception, namely, the institution responsible for paying compensation."
Mr Wood emphasises the sentence I have italicised.
"20. Against this background I turn to the interpretation of the phrase 'knew or ought to have known' in clause 6(1)(e) of the 1988 MIB agreement. This question of interpretation is governed by English law. The meaning of the phrase depends upon its context. Here the context is the Directive. The MIB agreement was entered into with the specific intention of giving direct effect to the Directive.
21. Had the MIB agreement been embodied in legislation, whether primary or secondary, the English court would have been under an obligation to interpret its provisions, as far as possible, in a way which gives effect to the Directive: see Marleasing SA v La Comercial Internacional de Alimentaciσn SA (Case C-106/89)  ECR I-I4135. As Lord Oliver of Aylmerton observed in Litster v Forth Dry Dock & Engineering Co Ltd  1 AC 546, 559, a purposive construction will be applied to legislation even though, perhaps, it may involve some departure from the strict and literal application of the words which the legislature has elected to use.
22. The present case does not involve legislation. Despite the contrary argument submitted to your Lordships, I do not see how the Marleasing principle, as such, can apply to the interpretation of the MIB agreement. The Marleasing principle cannot be stretched to the length of requiring contracts to be interpreted in a manner that would impose on one or other of the parties obligations which, Marleasing apart, the contract did not impose. This is so even in the case of a contract where one of the parties is an emanation of government, here, the Secretary of State. The citizen's obligations are those to which he agreed, as construed in accordance with normal principles of interpretation.
23. So the Marleasing principle must be put on one side. Even so, I consider that the application of conventional principles of interpretation of documents arrives at the same result. The purpose for which the MIB agreement was made furnishes a compelling context. The exception spelled out in clause 6(1)(e)(ii) of the agreement was intended by the parties to carry through the provisions of the Directive. The phrase "knew or ought to have known" in the agreement was intended to be co-extensive with the exception permitted by article 1 of the Directive. It was intended to bear the same meaning as 'knew' in the Directive. It should be construed accordingly. It is to be interpreted restrictively."
"16. At the time of the accident:
(a) the claimant was voluntarily allowing himself to be carried in the vehicle;
(b) the claimant knew before the commencement of the journey that the vehicle was being used in the course or furtherance of the crime."
Particulars were then given of the criminal use of the vehicle:
"Both the Claimant and the First Defendant were in possession of herbal cannabis at the time of the accident. In the claimant's case he had concealed a bag containing about 240 grammes of herbal cannabis beneath his clothes. This was a commercial quantity capable of making over 1,000 cigarettes. The purpose of the journey was either to take the cannabis to a location or locations where it could be sold on, probably in retail quantities, or to a place where it could be stored for such purposes. Either way, the claimant and/or the first defendant were committing a crime and/or using the vehicle in the course or in further of a crime."
"If, as I have found the claimant did place the cannabis under his coat then it follows he did so at some time before the accident. Given how long he had been in the car at the time of the accident and its position relative to his home when the incident occurred, I am also satisfied and find as a fact that he did so at some time after he left his own home and got into the first defendant's car", the emphasis being added by me.
"57. The only sensible explanation for the first defendant calling to collect the claimant was that they intended to travel together to acquire a sufficient quantity of cannabis for subsequent resale. That in my view is overwhelmingly more likely than the claimed spontaneous test drive. I therefore find as a fact that the purpose of the journey upon which the claimant and the first defendant embarked was the transportation of illegal drugs, namely cannabis. Whilst it is possible that the first defendant had collected the cannabis before he picked up the claimant, I consider it more likely that the drugs were collected after he had done so, given the direction in which they were travelling at the time of the accident and the fact that the larger quantity of cannabis was secreted upon the person of the claimant." (Again my emphasis added).
"25. He (the claimant) should not now be permitted to put forward an interpretation of the agreement which, had it been advanced at the trial, might have led to different findings of fact."
But he found:
26. I am unable to accept this objection. It was for MIB to establish the facts upon which MIB sought to rely to bring the case within clause 6(1)(e). In the course of his submissions to your Lordships, Mr O'Brien expressly disclaimed any wish to have the matter remitted so that the judge's findings of fact could be clarified or amplified on this point."
Lord Justice Richards :
i) First, I would not place any weight on the account given by Mr Pickett in his police interview. It would be unsurprising if he was seeking at that stage to assist the appellant by distancing him from the acquisition of the cannabis: Mr Pickett knew of the seriousness of the injuries sustained by the appellant and there was evidence that he had been in contact with the appellant's wife. The account he gave was inherently implausible and provided no explanation, let alone a credible explanation, of how the larger quantity of cannabis came to be secreted inside the appellant's coat. Further, although the transcript of the interview was included in the documents before the judge, it was not formally put in evidence, there was no witness statement from Mr Pickett and he was not called as a witness at the trial. The judge referred at  and  to the account given in the police interview, but he evidently discounted it. For the reasons I have given I think he was right to do so. Nor could any significance be attached to the fact that Mr Pickett was charged with, and pleaded guilty to, simple possession of the cannabis, not possession with intent to supply, or the fact that the appellant was not charged at all. The charging decisions taken by a Crown prosecutor on whatever material was available to him and by reference to the criminal standard of proof could have no bearing on the assessment to be made by the judge on the evidence at the civil trial and by reference to the civil standard of proof.
ii) The judge was also right, in my view, to find at  that the quantity of cannabis was far in excess of the amount required for personal use even by a heavy user and that it was intended for resale. Such a finding did not require the support of opinion evidence from a police officer. It was an obvious inference to draw even without such evidence. The notion that either the appellant or Mr Pickett, neither of whom was financially well off, would spend up to £1,000 in acquiring such a large stock of cannabis for personal use strikes me as fanciful. The fact that it was not possible to say how the resale was to be achieved does not matter.
iii) In my view the judge had good reason for rejecting the explanation that Mr Pickett had simply turned up out of the blue to take the appellant for a short "test drive" in his new car. It was Mrs Delaney who gave that evidence, stating that her husband said he would be back in about ten minutes. The judge accepted her evidence that Mr Pickett's call was unexpected so far as she was concerned, but correctly observed that the fact that she was led to believe that the purpose of the call was to take the appellant for a test drive did not necessarily mean that that was the true reason (see -). He expressly rejected her evidence that the appellant was due back within ten minutes (see ); a finding with which, as Ward LJ accepts, we cannot interfere. It was reasonable for the judge to consider that, whilst a test drive of the kind referred to could have been accomplished within ten minutes or so, it did not provide a satisfactory explanation for the journey actually undertaken - a journey in the dark which had already lasted some forty minutes by the time the accident occurred (see ). I accept that the fact that they were driving at high speed towards the appellant's home at the time of the accident does not assist on this point (though the fact that they were driving towards the appellant's home with the cannabis secreted inside his coat is consistent with the finding that they had acquired the cannabis after leaving his home). I also doubt the judge's observation that since the defendant had already acquired the car there was no obvious point in the appellant participating in a road test of it (but caution is needed here - although the appellant referred in his witness statement to Mr Pickett often taking him "for a spin" in his latest vehicle, he gave oral evidence at the trial and the expression "test drive" appears in the judge's summary of that evidence, at [34(vii)], so the choice of words may have been the appellant's). Those reservations, however, do not undermine the judge's essential reasoning on this issue.
iv) The judge linked this issue with consideration of when the cannabis was obtained (see ). He thought it unrealistic to suggest that, if the defendant had already acquired the cannabis and had it in the car, he would have stopped off to take the appellant for a test drive in the dark. I agree with him. I also think it implausible that, if the cannabis had simply happened to be in the car already at the start of the journey, the appellant would have secreted it underneath his coat as he did. The judge may have put it too high in referring to an inconsistency rather than an implausibility, but again his essential reasoning stands.
v) It follows that in my view the judge was right to find that the cannabis was acquired in the course of the journey and at a time when the appellant was present. He also rightly rejected, at , the idea that it might have been acquired by the defendant without reference to the appellant. The finding that the appellant was party to its acquisition was sound.
vi) All this provides a solid basis for the judge's conclusions at . The judge was correct to find on the balance of probabilities that the two men intended to travel together to acquire cannabis for resale and that the transportation of illegal drugs was therefore the purpose of the journey. That was more likely, even if not "overwhelmingly" more likely, than that they went on a spontaneous test drive. In my view, it was also more likely than any other explanation put forward, including the explanation given by Mr Pickett in interview which is preferred by Ward LJ. The judge's conclusions are not undermined by the fact that neither man had a criminal record for drug dealing, albeit such a record would no doubt have made the judge's task much easier.
Lord Justice Tomlinson: