Smith v Stratton & Anor

This is an appeal with permission granted by my Lord Moore-Bick LJ on 20 February 2015 against the decision of his HHJ Saffman sitting as a Judge of the High Court on 26 June 2014.

The question in the case was and is whether the Motor Insurers’ Bureau (“the MIB”), second defendants in the action and respondents in this court, are liable to meet the appellant’s claim for damages for personal injury sustained in a motor accident on 6 January 2011. The appellant was a back seat passenger in a Vauxhall Astra being driven by the first defendant, Stratton. The Astra struck a parked vehicle. Stratton has taken no part in the proceedings.

On 28 August 2012 the insurers, who would otherwise have been liable to cover the claim, obtained a declaration under section 152(2) of the Road Traffic Act 1988 by which they were entitled to avoid the relevant insurance policy for non-disclosure of material facts and misrepresentations made before the policy took effect. The first defendant Stratton thus became an uninsured driver and the MIB became responsible to meet the appellant’s claim against Stratton if a judgment against the latter were unsatisfied, subject (as the judge said) to certain exceptions with which this case is concerned.

The judge described the incident leading to the collision by reference to the witness statements of two police officers and said at paragraph 10 that:

“They were in a police vehicle. They came across the Astra driven by the first defendant. The Astra sought to accelerate away from the police vehicle and failed to heed a signal to stop. It drove in excess of 50 miles per hour in a 30 mile per hour zone when the roads were damp. It signalled one way but went another. It failed to heed the police vehicle’s sirens and flashing blue lights. It took a corner at such a speed as to skid sideways and ultimately the first defendant lost so much control that the vehicle collided with a parked vehicle.”

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There was no dispute unsurprisingly but that Stratton had driven negligently. The appellant (who was 20 at the time of the accident) suffered a severe brain injury. He is represented in the litigation by his mother as his litigation friend. There were in fact four young men in the car including the appellant. The MIB’s case was that they were in a joint enterprise of dealing in cannabis from the car and made off in the car when spotted by the police and this led directly to the collision and to the appellant’s injuries.

In those factual circumstances, as to which the burden of proof was upon the MIB on the balance of probabilities, the MIB claimed to be entitled to avoid liability in reliance on either or both of two exceptions in clause 6 of the Motor Insurers’ Bureau (Compensation of Victims of Uninsured Drivers) Agreement 1999 and/or the common-law maxim ex turpi causanon oritur actio. The material part of clause 6 of the MIB Agreement is set out by the judge at paragraph 14 and reads as follows:

“Clause 5 [requirement to pay an unsatisfied judgment] does not apply in the case of an application made in respect of a claim of any of the following descriptions…

(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…

(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.”

The judge explained the effect of the ex turpi maxim in this way (paragraph 11):

“This is the principle that the court will not lend their aid to a litigant so as to enable him to obtain a benefit from his own crime or reparation for the consequences of his own culpable, criminal act.”

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There was as the judge acknowledged (paragraph 25) no direct evidence that the appellant was involved in drug dealing from the car. The case was a circumstantial one. The judge was to conclude that the case was made out. The appellant by Mr Axon of counsel disputes that conclusion on this appeal.

The circumstances relied on by the MIB and found to be significant by the judge were as follows. First, all four occupants of the car had convictions for drugs offences and dishonesty, two of them (not the appellant) for conspiracy to supply drugs. The first defendant had a conviction for producing cannabis. The appellant had admitted to a neuropsychiatrist that he had used cannabis and cocaine himself. No prosecutions for drug-related crime arose out of the incident in question in January 2011 and some of the convictions to which the judge referred post-dated the collision.

The next point was this. Two small plastic bags of cannabis were found in immediately outside the Astra and one in the rear passenger footwell. The evidence of DC Tasker (see paragraph 37 of the judgment) was that the quantity found (4.73 grams) would produce 23 to 24 joints with a street value of about £40.

The next point was that all four young men were unemployed at the time but when detained one of them had £140 cash on him and another £215. Neither the appellant nor the first defendant had cash on their person. The total £355 would be the proceeds of something over 200 joints.

Next the first defendant, Stratton, drove off at speed when the police vehicle was sighted. Stratton told the police in interview that he had been pulled over twice the previous day and was going to show the police what he could do. However, the notes of the police interview (see judgment paragraph 26) also indicate that when the police vehicle was pointed out to him the first defendant asked the others what he should do and they replied, “Blow them”, that is, drive off fast enough for the tyres to produce smoke.

Mr Nicholls, solicitor to the MIB, gave oral evidence. He produced a signed statement which he took from the first defendant when he interviewed him in prison in an attempt to establish the purpose of the trip in the car but, said Mr Nicholls, there were some things that Stratton was not prepared to commit to writing. Mr Nicholls in his witness statement recorded Stratton as having said this (and it is set out by the judge at paragraph 52):

“All of us were dropping off drugs; £20 deal (Henry) [apparently Henry is one eighth of an ounce, named after His Late Majesty King Henry VIII).

3 bags skunk. About £20 each.

15 minutes dealing. Sold one.

Just done a deal. I handed it out window.

I took money. Don’t know who handed it to me.

Saw police. Joe mentioned it.

Drove away. Contd [standing presumably for ‘continued’] turns[?] Wheels span on mud.

All said ‘smoke em’.”

And that is the end of Mr Nicholls’ note of what Stratton had told him.

In his police interview Stratton said he was not aware of any drugs in the car. He, Stratton, was not called to give live evidence. A hearsay notice had been served but the appellant had not applied to the court under the Procedure Rules to have Stratton called for cross-examination. It is notable that in answers to a Part 18 request from the MIB’s solicitors it was asserted that the appellant’s purpose in taking the trip by car with the others was to get a lift to his mother’s house. His mother has signed her name below the statement of truth appended to the answers to the request.

The appellant did not himself give evidence. He apparently has no recollection of the car trip but it was contended that he could at least have given evidence of his lifestyle, such sources of income as he had and his relationship with the other three in the car. He had given an extensive account of his life to the neuropsychiatrist. The appellant’s mother (who did give evidence) accepted that that account was broadly correct.

Stratton’s ability to deal with these matters seems to me a perfectly reasonable consideration to which the judge drew attention at paragraph 92. As my Lord Moore-Bick LJ pointed out in the course of argument, the judge is not there drawing an adverse inference against the appellant for failure to give evidence. Rather, as it seems to me, he is indicating simply that the appellant had not put up any account in evidence to contradict what was being said by the MIB. The learned judge held (see paragraphs 82 and 97) that the cumulative effect of all these matters (building blocks, as Mr Featherby QC for the MIB called them) was to satisfy him that the MIB had proved to the relevant standard that the appellant had been involved in dealing in drugs from the car that evening. Amongst other observations the judge made a careful assessment of the weight to be attached to the hearsay evidence given by Mr Nicholls of Stratton’s account of the car trip (see paragraph 87) and the judge made additional observations about the other points.

Mr Axon seeks to assault the judge’s factual conclusion essentially on the basis that the inference ultimately drawn by the judge that the appellant was involved in selling drugs from the car was not open to him. Mr Axon makes various separate points about the individual factual elements in the case but it is with respect obvious and I think critical to this court’s assessment of the appellant’s factual challenge that the judge regarded the various points as cumulative, and rightly so. I have already referred to paragraph 82 where he makes that entirely clear. In my judgment the judge’s conclusion was not only open to him. So far as I can judge without having heard live evidence, I would for what it is worth have reached the same conclusion myself. The judge was entitled to take into account the fact that the appellant did not give evidence in the way I have indicated. There was nothing to rebut the inference which the MIB invited the judge to draw. In particular (and I would emphasis this) I consider that the judge was wholly entitled to attach weight to the hearsay statement made by Stratton. It is a forensic commonplace that statements against interest tend to be true. There is no criticism of Mr Nicholls’ conduct or of the accuracy of his report of what Stratton had said to him. Stratton had volunteered his account of the criminal enterprise in the car.

Mr Axon was at pains to submit that this court may draw inferences as readily as the trial judge, so we should feel free to disagree with the judge’s conclusion. He referred to Delaney [2011] EWDCA Civ 1532 at paragraphs 16 and 61. However that may be, for my part I consider that the inferences drawn by the judge were not only open to him but, as I have said, correct. Mr Axon accepted that if the judge was entitled to conclude that the first defendant’s comments were true the claim must fail. Mr Axon has made much of the fact that the first defendant had made it plain that he would not stand by what he had said to the solicitor. That, it seems to me, offers Mr Axon no assistance when one comes to consider the judge’s entitlement to attach weight to what Stratton had said. In all these circumstances there is with respect to Mr Axon, as I see it, nothing in the factual challenge here.

I turn to the legal effects of the judge’s conclusion on fact and first ex turpi causanon oritur actio. The judge cited the test for the application of this maxim as formulated by my Lord Elias LJ in Joyce v O’Brien [2014] 1 WLR 70 at paragraph 29 as follows:

“…where the character of the joint criminal enterprise is such that it is foreseeable that a party or parties may be subject to unusual or increased risks of harm as a consequence of the activities of the parties in pursuance of their criminal objectives, and the risk materialises, the injury can properly be said to be caused by the criminal act of the claimant even if it results from the negligent or intentional act of another party to the illegal enterprise.”

The judge held that in the light of this approach to the law the maxim applied here and did so for reasons given by the judge at paragraph 104 where he said this:

“The purpose of this enterprise, as I have found it, was the supply of drugs. The use of the car is integral to that purpose in my view. It facilitates the sale of drugs and importantly provides a means of rapid escape if escape is called for. It is in my view entirely foreseeable that the presence of the car on the estate with four men in it, one of whom at least is ‘well linked to drug dealing in the area’ will excite the interest of any passing police car and that if it does then it is equally foreseeable that an effort will be made to lose that police car. Such effort is overwhelmingly likely to involve making off at speed. The increased risk of injury as a result of the perceived necessity to travel beyond a safe speed is obvious. That is precisely what happened here and the accident was a direct result of the effort to avoid apprehension and in my view on Elias’ LJ’s test, must be seen to be caused by the criminal act rather than incidental to it...”

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In my judgment these conclusions are plainly justified. In particular the judge was entitled to find and did find that the first defendant drove off to evade the police. That was in effect the response of the four participants to the joint criminal enterprise in which they were engaged. I have already made clear my view that the judge was entitled to find that the four were indeed involved in such an enterprise. Once that is accepted and in particular once one observes the way the judge put ti towards the end of paragraph 104, Mr Axon’s criticism to the effect that there was no proper finding here that the vehicle made off because the individuals inside were concerned not to be stopped by the police may be seen to be without any force.

In all these circumstances in my judgment the learned judge below correctly applied the maxim ex turpi causanon oritur actio to the facts of the case. That is enough if my Lords agree to dispose of the appeal. I will say a brief word about the MIB Agreement. The learned judge said this at paragraph 107:

“It seems to me that on the basis of my findings it is inevitable that the exception provided by clause 6.1(iii) of the 1999 Agreement is engaged and there is no liability on the second defendant to meet any judgment against Mr Stratton. The preconditions for finding the exception that are set out in clause 6 and which I have attempted to paraphrase in paragraph 15 have clearly been made out for the reason already given.”

It seems to me the judge was quite right to apply the exception at (iii).

Reference has been made in the course of the proceedings to the decision in Delaney v Secretary of State for Transport [2015] EWCA Civ 172 in which this court upheld Jay J at first instance, to the effect that the exclusion in paragraph 6 of the MIB Agreement is incompatible with EU legislation relating to motor insurance (see per Richards LJ at paragraph 33), but (and I understand Mr Axon to accept this) it is of no assistance to the appellant here. The MIB Agreement is a contract between the MIB and the Secretary of State. Its incompatibility with EU directives may or may not give rise to a damages claim under European law against the state. I say nothing about that. It does not however touch the issues in these proceedings. Mr Axon in fact accepted that if we were against him on the issue relating to the ex turpi causa maxim then likewise his argument in relation to (iii) in the Agreement would fail. It seems to me he was right to make that concession. In the circumstances it is unnecessary to consider (iv) in paragraph 6.

For all the reasons I have given, then, I would dismiss this appeal.

I agree.

I also agree.