Delaney v Pickett & Anor

The Court of Appeal allowed the appellant's claim against the driver but rejected his claim against the insurers under the Motor Insurers' Bureau Agreement. The court held that the ex turpi causa defence did not bar the appellant's claim against the driver because the claimant's criminal activity was not the cause of his injuries; the injuries were caused by the defendant's negligent driving. The court considered causation as the proper test rather than an across-the-board public policy exclusion.

On the insurers' case under clause 6(1)(e)(iii) of the MIB Agreement (risk excluded where the vehicle is "being used in the course or furtherance of a crime"), the majority concluded that the agreement must be construed in its contractual and Directive context and, on the judge's factual findings that the journey was undertaken to transport drugs for resale, the exclusion applied. The result was that judgment against the driver stood but recovery from the insurers was excluded.

The appellant, seriously injured in a head-on collision while a front-seat passenger, sued the driver and the driver's insurers under the Motor Insurers' Bureau Agreement. At first instance the judge found, on the balance of probabilities, that both men were in joint possession of a large quantity of cannabis and that the purpose of the journey was the acquisition and transportation of drugs for subsequent resale. The judge dismissed the claim both on public policy/ex turpi causa grounds as to the driver and on clause 6(1)(e)(iii) of the MIB Agreement as to the insurers.

Nature of the claim: Personal injury claim in negligence against the driver and consequential claim against the insurer/MIB under the MIB Agreement (unsatisfied judgment).

Issues before the Court of Appeal:

• Whether the ex turpi causa/public policy defence barred the appellant's claim against the driver given the parties' illegal conduct;
• Whether clause 6(1)(e)(iii) of the Motor Insurers' Bureau Agreement excluded liability because the vehicle was being used "in the course or furtherance of a crime";
• Whether the trial judge's factual inferences (in particular that the journey's purpose was to transport drugs for resale) were open to be drawn on the evidence.

Court's reasoning: The leading judgment (Ward LJ) held that on causation grounds the appellant's injuries were caused by the defendant's negligent driving and not by the criminal activity; the illegal conduct was incidental and therefore did not bar recovery against the driver. Ward LJ found the trial judge's inferences about a joint enterprise to supply drugs were not compelled by the evidence and that the insurer had failed to prove possession with intent to supply on the balance of probabilities. On the insurer point Ward LJ also considered the 1999 Agreement in context of the Motor Insurers' Directive and concluded the exclusion should be construed restrictively and that, even if the clause were applicable literally, the insurers had not proved the pleaded temporal knowledge element required by clause 6(1)(e).

The majority (Richards LJ and Tomlinson LJ) accepted the trial judge's factual inferences that the journey was undertaken to acquire and transport cannabis for resale. They agreed the ex turpi cause defence did not bar the action against the driver but held that clause 6(1)(e)(iii) was engaged because possession of a commercial quantity for supply was a serious crime and the vehicle was being used in the course or furtherance of that crime; accordingly recovery from the insurers was excluded.

Appeal allowed in part. The Court of Appeal allowed the appellant's claim against the first respondent (the driver) because the injuries were caused by negligent driving and the illegality was incidental; however the majority held that the insurer's exception in clause 6(1)(e)(iii) applied on the judge's findings and dismissed the appellant's claim against the insurers.

Appeal from Walsall County Court (His Honour Judge Gregory) 6AF02992; appeal to the Court of Appeal allowed in part on 21 December 2011 ([2011] EWCA Civ 1532).