Case No: B3/2011/0333
Neutral Citation Number: [2011] EWCA Civ 1532
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM WALSALL COUNTY COURT
HIS HONOUR JUDGE GREGORY
6AF02992
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 21/12/2011
Before:

LORD JUSTICE WARD
LORD JUSTICE RICHARDS
and
LORD JUSTICE TOMLINSON
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Between:

	Sean Robert Delaney	Appellant	
	- and -		
	(1) Shane Pickett
and
(2) Tradewise Insurance Services Limited 	

Respondents	

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Graham Wood QC (instructed by Pinto Potts) for the appellant
William Featherby QC (instructed by Browne Jacobson LLP) for the respondents

Hearing date: 30th June 2011
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Judgment
LORD JUSTICE WARD: 
1.	The last thing Sean Delaney remembered was lighting fireworks at his children’s bonfire party on Guy Fawkes night 2006.  He next remembered waking up in hospital talking to his father on New Year’s Eve.  The cause of this nine week loss of memory was the severe head injuries and brain damage suffered by him as a result of a high speed motor collision on 25th November 2006 when his acquaintance, Shane Pickett, negligently drove the Mercedes 500 SL sports car in which he was the front seat passenger, head on into an oncoming Toyota people carrier.
2.	Mercifully no-one died.  But Sean Delaney was very seriously injured.  His Glasgow Coma scale was 4-5 at the site of the accident.  He had fractured his sternum, ribs, humerus, pelvis and ankle.  His diaphragm and spleen were ruptured.  His lungs were punctured.  He has not fully recovered.  He has suffered a change in personality.  He has needed and will continue to need extra care.  His employment prospects are bleak.  His claim for damages is, therefore, very substantial.  Yet his claim against Shane Pickett was dismissed by His Honour Judge Gregory sitting in the Coventry County Court on 26th January 2011 as was his claim against Tradewise Insurance Services Ltd brought under the provisions of the Uninsured Drivers Agreement made on 13th August 1999.  Why?  The reason given by the judge was:
“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 .  
The facts
3.	The appellant, Mr Delaney, was 33 years old at the time of the accident.  He has been married since 1994 and has 4 children ranging in age from 16 to 8.  He was employed as an estate caretaker but his passion is motor cars and he worked as a vocational tutor for school leavers who wanted to gain NVQs and obtain placements as motor vehicle mechanics.  The first defendant, Mr Pickett, was more an acquaintance than a close friend.  He too is a married man with children.  The families met on a few occasions each year.  His uncle was a motor trader and the defendant regularly had use of what the appellant considered to have been “very expensive and very flashy motor vehicles” which he would from time to time show off to the appellant and take him out “for a spin”.  
4.	On 25th November 2006 the defendant seems to have arrived unannounced and unexpectedly at the appellant’s home at about 6.25 in the evening.  He left accompanied by the appellant at about 6.35 pm in order to go, so they said, for a drive in this powerful sports car.  The collision occurred at no later than 7.14 pm on the B4113 Coventry Road in Nuneaton apparently on the way back to the appellant’s home which was about ¾ of a mile away.  
5.	The statements placed before the court show that the defendant was travelling at high speed, overtook a vehicle near some bollards in the centre of the road, passed those bollards on the wrong side of the road, saw the approaching people carrier, attempted to swerve back into his nearside but lost control and veered again to the offside into the path of the oncoming vehicle.  There was a head-on collision.  The defendant’s vehicle came to rest against a tree which jammed the driver’s door.  The vehicle was a complete write-off.  
6.	Not surprisingly the judge found at [9] that the defendant was negligent “by reason of excessive speed, a failure to steer a safe course and a failure to retain proper control over his car”.  However he also found at [74]:
“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.”
7.	By good fortune an ambulance travelling along the B4113 came upon the scene within a minute of the accident.  Two fire engines attended because the appellant and respondent were trapped in their car.  It was necessary for the roof and passenger door to be removed.  One of the fire officers, a Mr Kevin Brindley, gave evidence that the driver, who was conscious and apparently less injured than the passenger, was the first to be removed by manually hauling him from his seat and placing him on a long board across the back of the vehicle.  As that was being done Mr Brindley noticed an apparent swelling to his ankle and upon investigation found that a plastic packet the size of a tennis ball had been stuffed down his sock.  That package was subsequently handed to the police and upon examination was found to contain 34g of herbal cannabis sufficient to make 170 cannabis cigarettes.  
8.	This information, and much else, came from a number of statements obtained by the police and placed, with the apparent agreement of the parties, before the judge.  He appears to have treated them, and cannot be criticised for having treated them, as hearsay evidence to which he could give such weight as he thought to be appropriate in all the circumstances.  I shall approach them in the same way.  
9.	Having extracted the defendant, the fire officers, assisted by Ms Alexandra Smith, a paramedic member of the ambulance crew, removed the unconscious appellant from the car.  As he was being lifted out, his coat rode up exposing a package about the size of a small football.  It had a very distinctive herbal smell and upon examination was found to contain 240g of herbal cannabis sufficient for 1,200 cigarettes.  The combined street value of both packages was estimated by the police officers to be worth £674 or as much as £1,172 if it was “skunk” but which it was has never been established.  Mr Brindley and Ms Smith were patently honest and credible witnesses and the judge had no problem in being satisfied that this larger bag of cannabis was being held by the appellant underneath his closed bomber jacket.  
10.	On 7th March 2007 the defendant, as I shall call Mr Pickett, was interviewed by the police upon suspicion of dangerous driving and possession of a controlled drug.  The judge made some, but not detailed, reference to the explanations he gave for the cannabis that was found, observing that:
“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.  
11.	In a long tape-recorded interview conducted in the presence of his solicitor and concerned mainly with the dangerous driving, the defendant also volunteered the following.  He readily acknowledged that the bag found in his sock contained herbal cannabis.  Asked to whom it belonged he said, “Yes, it’s mine.”  Asked why he was in possession of it he replied, “I smoke it, I’d not long bought it prior to the accident.”  He then described where he had bought it but said his life would not be worth living if he identified his supplier.  Asked how long he had been using cannabis he said, “Years.  I started not as much as I do now.  Started lightly when me mum passed away, it progressed more after my accident, 6 years ago, I just haven’t been able to stop.  It helps with the pain, helps with a lot of things.”  He said he smoked cannabis every day usually and asked how many times a day he smoked he replied, “If I stay in all day, then all day providing I’ve got it.”  Asked if he was hooked on it he said he had tried coming off it and cutting down but it helped him sleep.  He said he paid £70 for the cannabis which he put straight into his sock and after that went to pick up the appellant.  He was challenged as to whether he was certain about those circumstances and it was suggested that the appellant was with him at the time he bought the cannabis.  He replied, “No, positive”.  The officer pressed him about the appellant being found in possession of a large bag of the same substance stuffed up inside his coat and the defendant replied, “Hmmm.  I don’t know why it was up his coat.”  Asked whether the appellant had bought his cannabis “from the same guy” the defendant replied, “No.  I don’t know why he is in possession of it.”  He explained, “What happened was, when I met the chap he give me that and he also had some returned off whoever he got rid of it to before.  He said I could have it on a lot cheaper scale than what I usually pay, which I agreed.”  He said he paid £1,200 for this larger amount which he left on the floor of the car.  Asked what he intended to do with both amounts of the cannabis he replied, “Take it home and store it in a Tupperware tub and gradually get a bit out every day, every week, enough for me to smoke every day.”  He denied there had been any discussion with the appellant about the cannabis.  He did not see the appellant put the packet down his jacket.  Asked whether the appellant used cannabis himself, he replied, “He used to years ago but not any more I don’t think but I haven’t seen him for years, I can’t say he’s stopped or he’s carried on, I don’t know.”  
12.	On 20th December 2007 the defendant appeared in the Crown Court at Warwick having pleaded guilty to dangerous driving and to having had in his possession 274g of cannabis.  He was sentenced to 10 months’ imprisonment in respect of the dangerous driving and 2 months’ concurrent in respect of the drugs offence.  It is, however, important to note that he was charged with and pleaded guilty to possession not only of the cannabis found in his sock but also of the cannabis that was recovered from the appellant.  It is also to be noted that he was not charged with possession with intent to supply.  
13.	As for the appellant, he acknowledged in his witness statement that he was “unruly when he was a young man”.  He admitted a number of previous convictions for driving offences, theft and burglary, but he has only one drugs related offence, being possession of cannabis for which he was given a conditional discharge in 1991 when he was 18 years of age.  He admitted that he occasionally smoked a joint of cannabis but he said he was not habitually involved in possession and was certainly not a dealer.  
14.	The judge found that the appellant and his wife were not “entirely satisfactory witnesses”.  They were challenged in respect of a claim made in respect of a gold chain said to have been irreparably damaged in the collision.  The judge thought their justification for that claim was “somewhat unsatisfactory” because the appearance of the chain was plainly inconsistent with the damage to it alleged by the appellant.  In the circumstances the judge found that the claim had been “dishonestly exaggerated by the claimant with the support of his wife”.  
15.	The primary facts found by the judge were that two quantities of cannabis were recovered from the Mercedes car, one coming from the right sock of the defendant and the other from underneath the coat of the appellant.  He rejected the suggestion that the defendant hid the cannabis under the appellant’s coat immediately after the accident at a time when the appellant was unconscious in an attempt to distance himself from it.  He rightly found that suggestion “fanciful”.  He made these findings:
“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
16.	Having found at [50] that the appellant and defendant were jointly in possession of the cannabis, he continued:
“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
17.	Although the appellant’s case at trial was that the defendant must have hidden the larger bag inside the appellant’s jacket whilst he was unconscious, that case was not surprisingly rejected.  The appellant now accepts:
(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.  
18.	Both men were, therefore, in possession of a quantity of a controlled drug.  Although it was open to the judge to find to that each man was in possession of that amount of cannabis found on him, all that is known of the appellant renders it unlikely that this quantity was his to do with as he pleased.  It is much more likely, as indeed the judge found, that they were jointly in possession of the whole.  The crucial question is whether they were in possession with intent to supply.  
19.	The burden of proving that is on the second defendant insurer.  The standard is the balance of probability.  The vital question is whether possession with intent to supply is more likely than possession for personal use by one or other or both of the appellant and the first defendant.  
20.	I acknowledge that the trial judge is uniquely placed to find the facts in any case but the inferences to be drawn from the primary facts can as readily be found by this Court as by the trial judge.  
21.	Having been satisfied that the appellant and the defendant were jointly in possession the judge here went on to find at [50] that:
“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. 
22.	The judge thought at [50] that it was “obvious” that the larger quantity was intended for resale.  The judge does not explain what was obviously improbable in Pickett having obtained the larger quantity for his personal use as he described. 
23.	The judge did not know how the resale was to be achieved by these two men who it should be noted, though it was not referred to by the judge, had no record of drug dealing at all.  The appellant’s only conviction was when he was 18 years old, 15 years before these events.  Pickett had no previous convictions for any drug offence of any kind, though he was an admitted heavy user.  His last conviction for theft was in 1993 when he was 19.  There is, therefore, nothing in their character or antecedents to suggest any tendency to engage in drug dealing.  
24.	I am not sure that the judge understood the appellant’s case as to why he went out with the defendant.  It was not, as the judge seems to have thought (see [52]) to have a “test drive” or to “road test” the car.  It was for the defendant to show off his new car and give the appellant the pleasure of going “for a spin” in it.  The appellant’s passion was motor cars.  It is not “unreal” to postulate as a real possibility that the cannabis was in the car when the appellant got into it.  Indeed that was the judge’s finding in [48] of his judgment.
25.	At [53] the judge found that the appellant’s conduct in secreting the cannabis underneath his coat was indicative of having been present at the time of acquisition.  That does not seem to me to be a permissible inference to draw.  Secreting it may show that he knew it was cannabis and accordingly that he had something to hide, but it tells you nothing about timing.  It cannot show that he was present at the time of acquisition.  Why is it more probable that the appellant was present on purchase than that Pickett had already acquired it?  This false reasoning causes me to doubt the judge’s conclusions.
26.	The judge was entitled to find that the evidence of the appellant and his wife dishonestly exaggerated a claim they might have made for damage to a gold chain.  The judge also rejected Mrs Delaney’s evidence that she believed that her husband would be back in 10 minutes.  I find that more difficult to understand though I am not in a position to overrule it.  The judge did not refer to (though he does not reject as a concoction) the diary which Mrs Delaney adduced in evidence, and which speaks, eloquently to me at least and with a real ring of truth, of her growing concern for her husband that fateful evening.  Be that as it may, I do not see the basis for the judge’s finding in [57] that the only sensible alternative for the defendant calling to collect the claimant was that they intended to travel together to acquire a sufficient quantity of cannabis for subsequent resale.  Why is that “overwhelmingly more likely” than the claimed spontaneous invitation to go for a “spin”.  The defendant had a “flash” car; he wanted to show it off, even make the appellant envious, and he happened to be in the vicinity.  Why not call in on the spur of moment as he had on other occasions in the past with other motor cars he wanted to boast about?  That seems to me to be more much probable than calling cold on an acquaintance, not a close friend, with a proposal that took no more than ten minutes to explain and to accept that they would go off together on a criminal enterprise.  To me this simply does not smack of pre-mediated joint activity to acquire a stash of cannabis to supply it, as the judge had to accept, sometime, somewhere, somehow.  I see nothing improbable in the defendant having already acquired two packets of cannabis in the way he explained it in his police interview.  He would not baulk at taking the appellant out, even if the car reeked of cannabis, because the appellant knew him to be a heavy user and so would not have been unduly surprised to find cannabis in the car.  He would have had nothing to hide from the appellant. 
27.	I do not see, moreover, how the direction in which they were travelling at the time of the accident – back to the appellant’s home – can make it more probable that the drugs were collected after the defendant had picked up the appellant as the judge infers at [57] – “more likely that the drugs were collected after [he had picked up the appellant], given the direction in which they were travelling at the time of the accident and …” (my emphasis being added).  They were driving back to the appellant’s home.  One simply cannot infer from the direction of travel anything about what they had been doing beforehand.  The reasoning is as suspect as the reasoning in [53] which I criticised at [25] above yet the judge repeats himself at [57] when adding as his second reason for his concluding that the drugs were collected in the course of the journey -  “and the fact that the larger quantity was of cannabis was secreted upon the person of the claimant.”   Neither fact justifies the inference.
28.	In the result, I cannot accept the correctness of the inferences drawn by the judge or the reasons he gives for reaching his conclusion.  Given that the defendant’s explanations are at least possible explanations of what happened and are not so inherently improbable that they can be cast on one side as fanciful possibilities, then I, for my part, even accepting the unreliability of Mr and Mrs Delaney, find that alternative more likely to have happened than that, as the judge concluded, this was a joint enterprise to use the car to acquire and transport cannabis with intent to supply.  If Pickett’s account is to be rejected as improbable some reason has to be given for excluding it as unlikely to have happened.  Even if I am wrong to prefer the likelihood of this being a  case of simple joint possession for Pickett’s personal use, the only permissible conclusion is that the insurer cannot and therefore does not satisfy the burden of proof which lies on it to establish the degree of criminality they seek to fix upon the appellant.  He is, therefore, to be treated as having been in simple possession of cannabis, not possession with intent to supply.  
29.	If that is correct, the defence fails.  Simple possession could not possibly have any causative effect on the defendant’s driving.  Nor could it possibly be said that simply because the driver and passengers were in possession of drugs the vehicle was being used in the course or furtherance of a crime.  
30.	Should I be wrong about this, and because this was the reason for permission being granted, I will consider these defences on the basis that this was, as the judge held, a case of possession of drugs with intent to supply.  
The ex turpi causa non oritur actio/public policy defence
31.	Mr Graham Wood Q.C. submitted in essence that this was not the sort of case where the court would not be able to determine the standard of care appropriate to be observed by the driver of the car.  It was not the sort of case where the vehicle was being used as a weapon of violence against the person or property or being driven dangerously aided and abetted by the passenger as in Pitts v Hunt [1991] 1 Q.B. 24.  Relying on Dillon L.J.’s judgment in that case he submitted that here the appellant had suffered a genuine wrong to which the unlawful conduct was incidental.  
32.	The judge held:
“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 [50] 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 [64] of his judgment set out at [2] 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.  
33.	Pitts v Hunt concerned a claim brought by a teenager pillion passenger on a motor cycle driven by his 16 year old friend when both were the worse for drink.  Throwing caution to the wind, they began to behave “in a reckless, irresponsible and idiotic way”.  They were clearly showing no concern for other users of the road and the trial judge drew the inference that they were deliberately riding in a way calculated to frighten others.  He found that the deceased driver of the motor cycle was riding recklessly and dangerously and that at the very least the claimant was aiding and abetting that driving.  Whilst he was not manipulating the controls of the machine, he was fully in agreement and encouraging the way in which the deceased was manipulating the controls.  In the course of that driving the motor cycle struck an oncoming car and the claimant sustained injuries which left him permanently partially disabled.  His claim failed.  One can understand why, yet there was no uniform approach between the three members of the court.  Beldam L.J. held at p. 46E:
“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 [1981] 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 [1987] 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 [1987] 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.”
34.	Those different approaches show how difficult it has been to find a coherent path of principle or policy which will lead to the right outcome in the particular case.  The task has been made easier by Gray v Thames Trains Ltd [2009] UKHL 33, [2009] 1 A.C. 1339 even though the factual situation there is different from that which confronts us.  There the claimant was a passenger in a train involved in a major railway accident.  He suffered post-traumatic stress disorder caused by the accident.  Whilst so suffering he killed a man and on conviction of manslaughter on the grounds of diminished responsibility was ordered to be detained in hospital under the Mental Health Act.  In an action against the train operator he claimed for loss of earnings after his detention and for loss of his liberty and damage to reputation and for his feelings of guilt and remorse consequent on the killing, all of which he said had resulted from the post-traumatic stress disorder caused by the defendants.  Lord Hoffmann said at [30]:
“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.”
35.	Two rules of public policy operated in that case.  In its wider form it was that you cannot recover compensation for loss which you have suffered in consequence of your own criminal act.  This wider rule has to be justified on the ground that it is offensive to public notions of fair distribution of resources that a claimant should be compensated (usually out of public funds) for the consequences of his own criminal conduct – see Lord Hoffmann at [51]).  In its narrower and more specific form, it is that you cannot recover for damage which flows from loss of liberty, a fine or other punishment lawfully imposed upon you in consequence of your own unlawful act.  In that case it is the law which, as a matter of penal policy, causes the damage and it would be inconsistent with the law to require you to be compensated for that damage.  
36.	This wider rule may raise problems of causation: was the injury truly a consequence of the claimant’s unlawful act or was it a consequence of the unlawful act only in the sense that it would not have happened if he had not been committing an unlawful act.  Lord Hoffmann referred to the judgment of Sir Murray Stuart-Smith at paragraph 70 in Vellino v Chief Constable of the Greater Manchester Police [2002] 1 W.L.R. 218 where he said: 
“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 [2000] 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 [2002] 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 [1996] QB 567, 571, [1996] 1 All ER 291, [1996] 2 WLR 239) and “arises directly ex turpi causa”: Bingham LJ in Saunders v Edwards [1987] 2 All ER 651, [1987] 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 [2002] 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 [1996] QB 567.”
37.	Therein lies the answer to the problem in this case.  It is not a question of whether or not it is impossible to determine the appropriate standard of care.  We are not concerned with the integrity of the legal system.  We do not need to ask whether the claim would be an affront to the public conscience.  There is no need for an analysis of the pleadings to establish whether or not the claimant is relying on his illegality to found his claim.  It is not a question of the claimant profiting from his own wrongdoing.  Here the crucial question is whether, on the one hand the criminal activity merely gave occasion for the tortious act of the defendant to be committed or whether, even though the accident would never have happened had they not made the journey which at some point involved their obtaining and/or transporting drugs with the intention to supply or on the other hand whether the immediate cause of the claimant’s damage was the negligent driving.  The answer to that question is in my judgment quite clear.  Viewed as a matter of causation, the damage suffered by the claimant was not caused by his or their criminal activity.  It was caused by the tortious act of the defendant in the negligent way in which he drove his motor car.  In those circumstances the illegal acts are incidental and the claimant is entitled to recover his loss.  
Clause 6(1)(e)(iii) of the Motor Insurers’ Bureau (MIB Agreement)
38.	Tradewise Insurance Services Ltd. (“the insurers”) were joined as second  defendant because, having fortuitously discovered Pickett’s confession of habitual drug use, they successfully took proceedings against him to avoid his policy of motor insurance taken out with them.  The Motor Insurers’ Bureau may have been the more appropriate defendant but nothing turns on that. The insurers accept their liability to meet the appellant’s claim for damages but plead the exceptions to their liability contained in the MIB Agreement.   
39.	This agreement was made on 13th August 1999 between the MIB, a company incorporated under the Companies Act, and the Secretary of State for the Environment, Transport and the Regions.  Among the principal terms is the following:
“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) -
(a) … 
(b) …
(c) … 
(d) … 
(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.”
40.	Judge Gregory rejected Mr Wood’s arguments and accepted the submission of Mr William Featherby Q.C. for the insurers that he “should approach the interpretation of the provision upon the basis of the natural and ordinary meaning of the words”.  Upon that basis, given the findings of fact he made, he held that the insurers were entitled to rely on the exception and as a consequence the claimant was not entitled to recover compensation from the insurers.  
41.	If a literal construction is to be given to the clause, and if this was a case of possession of drugs with intent to supply, then I would agree with the judge that the exception applies.  A motor vehicle is being used in the course of crime if it is being used in the process of committing the crime and as a subordinate part of the carrying out or carrying on of the criminal activity.  In furtherance of the crime means that the vehicle is being used to advance or to help the commission of the crime.  If the crime was indeed possession of cannabis with intent to supply it, then on the judge’s findings that “the purpose of the journey upon which the claimant and first defendant embarked was the transportation of illegal drugs”, it is difficult to see how that was not in the course or in furtherance of the crime of possessing drugs with intent to supply.
42.	I am not, however, satisfied that the judge was right in his approach to the construction of the agreement, nor, for the reasons I have already given, in the findings of fact he made.   
43.	I turn, therefore, to the proper meaning to be given to clause 6(1)(e)(iii).  (I shall call it “the clause”).  The task of the court is to construe this clause as part of an agreement made between a company and the Secretary of State.  The usual canons of construction apply.  We are regularly referred to and are familiar with Lord Hoffmann’s five principles adumbrated in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 W.L.R. 896, 912-913.  We have been told that interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.  The background or matrix of fact includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.  Previous negotiations are excluded.  The meaning which a document would convey to a reasonable man is not the same thing as the meaning of its words which are a matter of dictionaries and grammar.  If one would conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had.  
44.	Here the background includes the Motor Insurers Directive to which the United Kingdom is obliged to give effect.  The meaning of the clause depends on its context and here the context is that Directive.  At the time it was Directive 84/5/EEC of 30th December 2003; now it is Directive 2009/103/EEC of 16th September 2009.  There is no material difference between them for present purposes.  Article 1(4) of the earlier Directive required Member States to set up or authorise a body with the task of providing compensation for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligation has not been satisfied.  The only exception is in these terms:
“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.
45.	The agreement has been considered by the European Court of Justice in Evans v The Secretary of State for the Environment, Transport and the Regions and the Motor Insurance Bureau Case C-63/01 on 4th December 2003:
“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.”
46.	The Agreement has also been considered by the House of Lords in White v White [2001] UKHL 9, [2001] 1 W.L.R. 481 where the issue was as to the meaning given to the words “knew or ought to have known”.  The speech of Lord Nichols is helpful.  First he considered the Directive and said:
“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.  
47.	Lord Nicholls then considered the interpretation of the MIB Agreement and said:
“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 Alimentación SA (Case C-106/89) [1990] ECR I-I4135.  As Lord Oliver of Aylmerton observed in Litster v Forth Dry Dock & Engineering Co Ltd [1990] 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.”
48.	How do those principles apply in this case?  The undeniable purpose of the Convention and of the Agreement is to provide compensation for passengers in a vehicle which is uninsured.  Exceptions should be restrictively construed.  A literal meaning to the clause with which we are concerned is too restrictive.  It simply cannot mean that compensation is excluded if the vehicle is being used in the course or in furtherance of any crime.  If the vehicle is being driven at a speed beyond a legal limit it is being used in the course of or in furtherance of a road traffic offence.  It would be sad to say that the injured passenger could not recover from MIB for negligent driving in excess of that limit.  So crime cannot mean any crime.  It must mean serious crime, whatever that might mean.  Apply that drugs offences.  Assume this is a vehicle which has been specially fitted with secret false compartments, loaded with a huge supply of heroin in some foreign part and in being driven to its distribution point in England when involved in a road traffic accident.  No question there but that the vehicle is being used in the course of or in furtherance of crime and the importers face very many years in prison.  That is serious crime.  At the other end of the spectrum, three young men at a Saturday night “gig” find it all rather boring and A asks B to drive him to the local public house in order to buy three “spliffs” of cannabis, one for each of them and a third for their friend C who remains at the party.  A and B are in possession of their cannabis with intent to supply.  Assume further that the passenger’s claim is worth millions of pounds because he is catastrophically injured.  Does proportionality demand he get nothing from the uninsured driver because of the vehicle being used for that crime?  I am in no doubt that that, too, would be an absurd result.  
49.	“Crime” in the clause must be construed as a crime of such a kind as would give the driver a good defence of illegality.  If the criminal activity can exculpate the driver, it should exculpate MIB.  I hear at once the cry of protest that if the driver is exonerated, there is in any event no liability for MIB to cover and so the exemption is rendered futile and the words are rendered otiose.  Too true.  But given the obligation to construe the exception restrictively so as to give effect to the agreement (and the obligation of the Directive) better by far that we have in an agreement (and it will not be for the first time that we find this) words which in some cases and for some purposes are surplusage and so can be ignored.  The exception will apply if the criminal activity does not give the driver his ex turpi causa defence and the same activity gives the insurer its clause 6(1)(e)(iii) exception.  Better, I say, that there should be consistency between the position of the driver and the insurer who otherwise stands in his shoes in all respects rather than that a narrow construction should defeat the fundamental purpose which the agreement was expected to serve.  
50.	If that is the proper construction, then the use of the vehicle for this drugs offence, whether classified as possession with intent to supply or as simple possession is not heinous enough to be the kind of crime covered by the clause.  
51.	That is not the only reason why I would reject the insurer’s case.  Clause 6(1)(e) only applies to a claim 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 …”.  The insurer’s pleaded defence was:
“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.”
52.	In his reply the claimant admitted paragraph 16(a) but put paragraph 16(b) in issue.
53.	So an integral part of the defence was that the claimant knew of the illegal use to be made of the vehicle before the commencement of the journey.  The defence did not plead the alternative case that the claimant knew of that use after such commencement but could reasonably have been expected to have alighted from the vehicle.  
54.	The insurer failed to prove its case.  I repeat paragraph 48 of the judgment:
“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.
55.	In paragraph 57 the judge said:
“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).
56.	There is, therefore, in my judgment, no clear finding that the claimant knew of the illegal purpose before the commencement of the journey.  In my judgment the only inference that can be drawn from the primary facts is that he did not know and only discovered the cannabis in the car once he had entered in it and started out on the journey.  If I am wrong about that then, as I have already explained, I do not see how the one hypothesis is more probable than the other and in that event the insurer fails to discharge the burden of proof which lies upon it.  
57.	I readily acknowledge that this point was not taken by Mr Wood nor adverted to during the course of argument.  I only saw it long after I had started reading carefully into the papers.  No doubt Mr Featherby will protest as Mr O’Brien, appearing for MIB, objected to Mr White being permitted to advance a case in the House of Lords based on an interpretation of the agreement that was not advanced at the trial.  As Lord Nicholls records the objection:
“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.”
58.	If Mr Featherby asks to be heard on this point, then of course he should be allowed to advance his case, not that he is likely to do in view of my Lords’ judgments which I have now had the opportunity to read.  My preliminary view is that I would not permit the matter to be referred back to the judge because there is no direct evidence on this point and it must depend on inferences to be drawn from the primary facts.  The insurers are simply unable to prove the case they alleged.  They failed to allege that which they might have been able to prove namely that the claimant could reasonably have been expected to have alighted from the vehicle when he discovered the cannabis being carried in it.  It is too late to raise that alternative case now.  
Conclusion
59.	For all those reasons I would allow this appeal and enter judgment for the claimant for damages to be assessed.  
Lord Justice Richards : 
60.	I regret that I cannot agree with the main conclusion reached by Ward LJ.  Whilst I have great sympathy for the appellant, Mr Delaney, as regards the serious injuries he sustained in the accident and I appreciate how great a difference it would make to his life to be able to recover financial compensation under the provisions of the MIB Agreement, I am of the opinion that the judge was correct to dismiss his claim against the insurers.  I do agree that his claim against the first respondent, Mr Pickett, is not defeated by the defence of ex turpi causa, but success in that claim will not of itself be of any real significance to him.
61.	The judge’s analysis of the facts, leading up to the conclusion at [57] of his judgment that the purpose of the journey on which the two men embarked was the transportation of cannabis intended for resale and that they were acting in concert in a joint enterprise for illegal purposes, depended heavily on inferences from the primary facts he found.  I accept that this court is well placed and entitled to reconsider such inferences for itself (see Datec Electronic Holdings Ltd v UPS Ltd [2007] UKHL 23, [2007] 1 WLR 1325 at [46]-[47] for the correct approach of an appellate court in such a situation).  In my judgment, however, there was a sound basis for the inferences drawn by the judge and I am not persuaded that he was wrong to reach the conclusion he did, in what I regard as a careful and thorough judgment.  
62.	There is no challenge to the judge’s findings of primary fact or to his findings, as a matter of inference, that the appellant placed the larger quantity of cannabis under his coat himself, that he did so at some time after he got into the car, and that he was well aware at the time that it was cannabis and was a relatively large quantity of that illegal drug.  Ward LJ’s criticisms relate to the remainder of the judge’s analysis, at [50]-[57].  The main points on which I respectfully disagree with Ward LJ’s approach are these:
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 [27] and [47] 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 [50] 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 [41]-[42]).  He expressly rejected her evidence that the appellant was due back within ten minutes (see [55]); 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 [52]).  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 [53]).  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 [54], 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 [57].  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.
63.	Accordingly, I take the view that the judge proceeded on a correct factual basis when considering the issue of ex turpi causa and the issue arising under the MIB Agreement. 
64.	I need say very little on ex turpi causa, since I agree with Ward LJ that the judge was wrong to uphold the defence even on the facts he found.  As to [63] of the judge’s judgment, quoted at [33] above, I do not think that the judge was attributing the conduct in question to the appellant and Mr Pickett; he was simply giving an example based on his knowledge of how dealing is typically carried out.  But it is unnecessary to spend time on the example.  The relevant question is whether the defence should succeed on the facts of the present case.  For the reasons given by Ward LJ, applying the reasoning in Gray v Thames Trains Ltd [2009] 1 AC 1339, I do not think that it should.   The same result would in my view follow from application of the various strands of reasoning in Pitts v Hunt [1991] 2 QB 24. 
65.	On that basis the appellant is entitled to judgment against Mr Pickett.  There is, however, no real prospect of Mr Pickett personally being able to satisfy the judgment.  He did have an insurance policy but this was avoided by the insurers for material non-disclosure.  That is why the appellant needs to fall back on the MIB Agreement.  The effect of clause 5 of the MIB Agreement is that the MIB is liable to meet the judgment unless, so far as relevant, the situation falls within the exclusion in clause 6(1)(e).  In fact, by virtue of article 75 of the MIB’s Articles of Association, responsibility for payment of any sum due to the appellant under the agreement lies in the circumstances with the insurers, not with the MIB itself.  That explains the participation of the insurers, rather than the MIB, in the proceedings.
66.	The material provisions of the MIB Agreement are set out at [39] above.  The focus is on clause 6(1)(e) and whether, on the facts found by the judge, this is “a claim which is made in respect of a relevant liability … 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 … (iii) the vehicle was being used in the course or furtherance of a crime”.  There is no dispute that the claim is in respect of a relevant liability.  It is the application of the rest of the provision that is in issue.
67.	Although in general terms the MIB Agreement is intended to give effect to EC directives on motor insurance, currently Directive 2009/103/EC, the directives give only limited assistance in this case.  That is because they contain no provision corresponding even broadly to clause 6(1)(e) or allowing on the face of it for an exclusion of the kind it contains.  No point is taken as to the compatibility of clause 6(1)(e) with the directives, and for the purposes of these proceedings it falls to be applied as a valid exclusion.   But the fact is that, unlike in White v White [2001] 1 WLR 481, the directives provide nothing by way of relevant specific context to assist in the process of interpretation of the clause.  The most one can say is that a restrictive interpretation is called for by the very fact that it is an exclusion from the general principle of compensation set out in the directives.
68.	I think it obvious that, on the facts as found, the vehicle was being used “in the … furtherance of a crime”, if not also “in the course … of a crime”, within the meaning of the clause.  Mr Featherby QC, for the insurers, did not contend that the exclusion applies to any crime, however minor, but submitted that it does apply where the conduct is so reprehensible that it deserves public condemnation:  he pointed to the other exclusions as showing a policy that there should be no compensation where there is conspicuous wrongdoing.  Ward LJ takes the view that “crime” must mean “serious crime” and then goes on to equate this with crime of such a kind as would give the driver a good defence of illegality (see [48]-[49] above).   For my part, I would readily read the clause as being subject to an implicit de minimis exception, but I am not prepared to read into it a qualification as heavy as that favoured by Ward LJ, which would, as he recognises, leave the clause with little, if any, practical purpose.  Even if one treats “crime” as a reference to “serious crime”, I take the view that the possession of a commercial quantity of cannabis with intent to supply is a serious crime to which the clause applies; and given the judge’s finding that the very purpose of the journey was the transportation of the illegal drugs, the situation seems to me to fall squarely within the wording of the clause and the policy that underlies it (to the extent that such policy can be gleaned from the other exclusions).  I do not accept a submission by Mr Wood QC that the use of the vehicle has to constitute an ingredient of the offence for the exclusion to apply.
69.	Ward LJ has given another reason, at [51]-[58] above, why in his judgment the appellant should not succeed under clause 6(1)(e), namely that the insurers failed to prove their pleaded case that “the claimant knew before the commencement of the journey that the vehicle was being used in the course or furtherance of the crime”:  he says that there was no clear finding that the appellant knew of the illegal purpose before the commencement of the journey.  I cannot subscribe to that approach.  In my view the judge’s conclusions at [57] of his judgment do involve a clear finding that the appellant knew of the illegal purpose before the commencement of the journey.  It seems to me that the factual points made in this context by Ward LJ go back to his previous criticisms of the judge’s findings of fact; but once one accepts the correctness of the judge’s findings of fact, as I have done, the points really fall away.  I add for good measure that I would be extremely reluctant to decide this appeal on a pleading point not raised by leading counsel for the appellant and not touched on even remotely in the written or oral submissions of either counsel.   
70.	For those reasons I would allow the appeal against the first respondent, Mr Pickett, and would enter judgment accordingly against him, but I would dismiss the appeal against the second respondent, the insurers.
Lord Justice Tomlinson: 
71.	Save in one small and for present purposes immaterial respect I agree with Richards LJ.
72.	Like him I regard the judge as having provided convincing reasons for the inferences which he derived from his findings of primary fact, conclusions to which he came after a process of conscientious evaluation of the inherent probabilities rather than mere resort to what to many might have seemed the obvious explanation.
73.	This is not the occasion for an examination of the conceptual foundation of the ex turpi causa defence.  However the matter is looked at, there was no relevant nexus between the illegality upon which the Appellant was engaged and the tortious conduct of Mr Pickett which gave rise to his injuries.  There is no reason why the duty of care owed by Mr Pickett to other road users should not be regarded as owed equally to his passenger.  There is no difficulty in ascertaining the standard of care required – it is wholly unaffected by the nature of the enterprise upon which they were embarked.  Nor do I see any affront to the public conscience in an award of damages against Mr Pickett in favour of the Appellant.
74.	Different considerations however apply where the question is whether the judgment, if unsatisfied by Mr Pickett, should be met out of public funds, as is effectively and usually the case where the liability of the MIB is engaged.  Having avoided liability for non-disclosure Mr Pickett’s insurers must have tendered, or at any rate are obliged to tender, a return of his premium.  Whether a liability is met by the MIB or, as it would be here, by the designated insurer, ultimately such recoveries are funded by an increment on the premiums paid by all insured motorists.
75.	I do not find it surprising that the 1999 MIB Agreement contains a provision along the lines of clause 6(1)(e). It was a matter for agreement and no doubt negotiation in what circumstances the MIB would meet an unsatisfied judgment.  There would obviously be circumstances in which it might be thought inappropriate so to do, the identification of those circumstances being no doubt a matter of debate. It is important to note that no argument was addressed to us to the effect that clause 6(1)(e)(iii) is incompatible with any relevant European Directive.  We were shown only the 2009 Motor Insurance Directive, to which my lords have already referred.  It may be that the Directive in the light of which the 1999 MIB Agreement falls immediately to be construed is an earlier version, presumably the Third Council Directive 90/232/EEC of 14 May 1990.   But nothing turns on this since it was accepted by Mr Wood that neither Directive is exhaustive as to the scope of permissible exclusions.  In the light of this, and in circumstances where the only exclusion specifically mentioned in the Directive (now in Article 10.2 of the 2009 Directive) is that reflected in clause 6(1)(e)(ii) of the MIB Agreement, I agree with Richards LJ that in this case we obtain little assistance from the legislative background.  Agreements of this type between the Motor Insurers Bureau and the Minister of War Transport and Minister of Transport of course date back to 1945 and 1946, long pre-dating any relevant community instruments.
76.	Mr Wood’s principal argument in this respect was, as I understood it, that the relevant exclusion is only applicable where there is some direct connection between the use of the vehicle and the commission of the crime, in the sense that the use of the vehicle constitutes an essential or identifying element in or of the offence itself – as, for example, in the use of a vehicle for ram-raiding, or where a vehicle has been significantly adapted for people or drug smuggling.  The judge had he said erred in his approach by focussing on the journey or its purpose rather than the vehicle and its use.
77.	I find it difficult to spell out of the words used any distinction of this sort.  Mr Wood’s approach is of course inspired by the desire to avoid the application of the exclusion where some minor crime is being committed, the example he gave being the mere possession of a very small quantity of cannabis.  I doubt if in such circumstances it could normally properly be said that the vehicle was being used in the course of or still less in the furtherance of a crime, since there would often be no real connection between the use of the vehicle and the commission of the crime.  But that is in any event not this case.  The judge found that the purpose of the journey was the acquisition and transportation of illegal drugs for resale.  Like Richards LJ, I do not see how in these circumstances there can be any sensible conclusion other than that the vehicle was being used both in the course of and in the furtherance of a crime.  Even if there is to be drawn some such distinction as that for which Mr Wood contends, the vehicle was here an essential element in the crime.  Mr Delaney and Mr Pickett would hardly have wished to carry so large a packet of illegal drugs with a distinctive herbal smell on public transport, even assuming the journey could have been accomplished in that manner.  The use of the vehicle was not incidental to the crime, it was an integral part of it.
78.	Naturally I see the force of Mr Wood’s objection that adoption of this line of reasoning could lead to recovery being denied in circumstances where the crime in course of commission is minor.  However I see no escape from this possibility.  Mr Wood submitted that in such a case it would be unconscionable for recovery to be denied.  A conclusion of that sort involves a value judgment as to the use of what are effectively public funds which the court is ill-equipped to make.  In terms of the relationship between the injuries suffered and the nature and seriousness of the crime, it could be said to be equally unconscionable that Mr Delaney should be denied recovery had it been the case that he was being knowingly driven in a vehicle adapted to carry and carrying large quantities of heroin for resale.  There would be no greater relationship in such a case than there is here between the crime and the tortious infliction of the injuries.  Yet as I understand his argument Mr Wood accepts that in such a case clause 6(1)(e)(iii) would bar recovery.  So the argument really comes to no more than that it is disproportionate that a man should be denied recovery because he was engaged in minor crime, whereas it can be accepted that he should be denied recovery where engaged in serious crime, notwithstanding there is in neither case no relevant connection between the crime and the tortious conduct.
79.	The circumstances in which the MIB would meet an unsatisfied judgment were a matter of agreement between the MIB and the Secretary of State.  The application of the exclusion to the facts of the present case is in my judgment not in doubt.  For my part I am a little uncomfortable with the notion that hard cases can be regarded as capable of being dealt with by a de minimis gloss upon the exception.  For the reasons I have endeavoured to state, that which is potentially to be regarded as de minimis, the heinousness of the crime, is of no necessary relevance to the tortious conduct giving rise to the injuries and thus a de minimis exception potentially involves the court in making a value judgment which is in any event irrelevant to the criteria pursuant to which the MIB has agreed to accept responsibility.  However one approaches the clause its application will involve results where the consequence to the injured victim will appear disproportionate to his culpability.  A person who allows himself to be driven in a stolen car may suffer catastrophic injuries through negligent driving wholly unconnected with the circumstance that the vehicle is stolen, in which event recovery is on any showing absolutely barred by clause 6(1)(e)(ii).  The Agreement does not provide that culpability is to be the touchstone of recovery.  We were told by Mr Featherby that in practice the MIB does not rely upon the exception where the crime involved is minor.  The Agreement in its current form has been in place since 1999 and there is no evidence that its application in practice by the MIB has given rise to concern.  I have no doubt that if the MIB did depart from what we are told is its practice it would find itself under pressure to revise the Agreement.
80.	For all these reasons my sympathy for Mr Delaney, who has suffered grievous injuries unconnected with the criminal conduct upon which he was embarked, does not enable me to construe the Agreement in a manner which permits recovery from the MIB or from the designated insurer.  It has not been agreed by the MIB that such claims, if unsatisfied by the tortfeasor, will be met out of public funds.  I too would allow the appeal against Mr Pickett but dismiss the appeal against the insurers.