Brian Payne, 28, a financial assistant, denies causing the death of his childhood friend Paul Wright, 26, by dangerous driving a year ago.
Stephen Holt, for the prosecution, said Mr Payne and his friend left a nightclub in the early hours of the morning. He was alone in his black BMW while Mr Wright had four girls as passengers in his silver BMW. As they drove a race developed between them.
'It wasn't an aggressive race in the sense of two strangers vying for position, it was a race between two friends,' Mr Holt said.
'As the cars drew up at traffic lights they smiled and waved at each other and on one occasion Payne gave chewing gum to a girl in the other car.'
But as they sped through Norwood High Street in south London, at speeds of up to 60mph, Mr Payne 'cut up' his friend, bumping his car as he tried to overtake.
Mr Wright's car went out of control, overturned and hit a tree with such force it uprooted it. He was killed outright and one of his passengers, Kim Harris, 22, was paralysed and now has to use a wheelchair.
Tests showed Mr Wright was slightly over the blood alcohol limit for driving. Mr Payne had not been drinking.
The court was told that Mr Payne, who stopped and tried to help at the crash scene, was too shocked to be interviewed for two days.
The case continues today.