POLICE will allege in court that it was a loaded pistol in the possession of James Kevin Cook that caused a vehicle to leave the Pacific Highway and cause a fiery crash that killed two men, and left a woman with life-long injuries.

Detective Acting Inspector Peter O'Reilly fronted the media in Coffs Harbour this morning following the arrest of Cook in Grafton's Victoria St on Wednesday.

The 34-year-old was charged with two counts of murder last night after police found the small pistol which was allegedly involved in the December 2018 crash that took place on the Pacific Hwy between Glenugie and Halfway Creek.

Det A/Insp O'Reilly said all parties were known to each other and it is believed they had been involved in a "disagreement" before the vehicles, a Mitsubishi Lancer and a Commodore driven by Cook, could be seen driving erratically on the highway.

CCTV, dashcam and witness accounts showed the vehicles were travelling north before they turned around and began travelling south.

"It was apparent this man was certainly known to the people in the other vehicle," he said.

"There was obviously a disagreement between the parties, which resulted in them being mobile, travelling in near vicinity to each other.

Detective Senior Sergeant Tony O'Reilly, Coffs Clarence Police.. 04 July 2019
Coffs Clarence Crime Manager Senior Sergeant Peter O'Reilly. TREVOR VEALE

"Evidence investigators have been able to piece together is that the actions of this man has caused the other vehicle to leave the road and subsequently cause these people to pass away.

"Investigators have established there was a firearm involved and police will allege it caused the other people to leave the roadway."

Det A/Insp O'Reilly said the Mitsubishi Lancer crashed through a fence rolled a number of times and caught fire.

Cook allegedly left the scene without contacting emergency services.

It was passing by motorists that called emergency services, and the 39-year-old woman was then extracted from the vehicle and airlifted from the scene in a serious condition.

She has suffered permanent injury as a result of the incident.

Grafton man Daniel Elliot, 42, and Jucabia man Jared Ward died in the accident.

Det A/Insp O'Reilly declined to comment on any criminal links out of respect for the victims' families, but said Cook was known to police.