The Taoyuan District Court ordered Xu Nan and Sinofaxing Logistics to jointly and severally compensate each other over NT$870.78 million.

In March 2022, a major fire broke out in the Carrefour Yangmei Logistics Center. It was caused by a 23-year-old temporary worker named Xu who was unpacking cabinets and smoked in the non-smoking pallet temporary storage area and then discarded the unextinguished cigarette butts, causing a huge loss of more than 3.9 billion yuan. Fubon Property & Casualty Insurance Company, which underwrites fire insurance, exercised subrogation in accordance with the insurance law after indemnifying Jiafu Company. The Taoyuan District Court recently ruled that Xu Nan and his supervisory unit, Zhongfaxing Logistics Company, must jointly and severally compensate more than 870.78 million yuan.

Fubon Property Insurance claims that Jiafu Company (now renamed Kangda Shengtong) signed a logistics service agreement with Zhongfaxing Company, entrusting it to be responsible for the acceptance and inspection, tallying, warehousing and logistics distribution services of the Yangmei Logistics Center. According to the service agreement, Zhongfaxing Company should also bear the responsibility for internal safety management of the warehouse, including the prevention of fires caused by littering cigarette butts due to smoking, especially in 2021. A small fire broke out at the Yangmei Logistics Center on August 16. Zhongfaxing Company promised to improve it. It should have paid special attention to the non-smoking management in the storage area and strengthened inspections and controls. However, it allowed Xu Nan to smoke illegally and throw cigarette butts arbitrarily. After deducting the compensation that Jiafu Company had requested from Zhongfaxing Company, it also sued Xu Nan and Zhongfaxing Company for compensation of 870,783,155 yuan in subrogation in accordance with the insurance law.

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During the course of the litigation, Zhongfaxing Company put forward a number of defenses, including that it had purchased 125 million yuan of insurance in accordance with the logistics service agreement, and Jiafu Company and its insurance company promised to give up the right of recourse in accordance with the law. In terms of contractual responsibilities, Zhongfaxing Company emphasized that according to the English version of the agreement, it only needs to guard against theft and plunder. The fire in this case was not caused by bandits, and the unpacking business was outsourced to a third party, and the point of the fire was not within its service scope. Xu Nan was hired and dispatched by the contractor. Smoking in the no-smoking area is purely a personal violation. In addition, Jiafu Company has declared a joint fire protection plan and should bear part of the site fire safety responsibility.

In addition, Sinofaxing also argued that the five major items claimed by Fubon Property & Casualty Insurance for subrogation, including cleanup fees, cargo damage and business interruption, completely overlapped with the scope of claims filed by Jiafu Company in a separate lawsuit.

Xu Nan said, "The amount is too high and I can't afford it." The fire was not caused by him. He was responsible for smoking there, but he did not cause the fire and should not be held responsible.

The judgment pointed out that Xu Nan was sentenced to six months in prison for the crime of public danger. He did indeed litter with unextinguished cigarette butts and cause disasters. His defense was insufficient. Xu Nan also testified that he was instructed by an employee named Zhang of Zhongfaxing Company to engage in cabinet removal work. In addition, according to Jiafu Company and Zhongfa The service agreement with Societe Generale stipulates that Jiafu Company has appointed Zhongfaxing Company to handle the logistics work of the Yangmei Logistics Center, including storage of goods, tallying, distribution, and inventory management. Zhongfaxing Company is responsible for ensuring the internal safety of the Yangmei Logistics Center.

In addition, although Zhongfa Xing argued that the cabinet demolition work was undertaken by a contractor, Zhang Nan went to perform the work and was commanded and supervised by Zhongfa Xing employees. This is sufficient to recognize that Xu Nan is an employee of Zhongfa Xing, and Zhongfa Xing should bear joint and several liability for compensation. The other arguments are also insufficient.