Case Study – A Brief Overview Of Naza Italia Sdn Bhd v Perfect Logistic Services
In this article, we will take a quick look at the case of Naza Italia Sdn Bhd v Perfect Logistic Services and whether the claim of vicarious liability was successfully established in that case.
Brief facts of the case
Naza Italia, a company that has exclusive rights in selling Ferraris and its spare parts in Malaysia (as well as providing repair services for the cars) purchased two Ferraris from the car makers (Ferrari SpA) in Italy. The cars were stolen while it was in transit from the Italian manufacturer to the port in Italy. The events leading up to the incident are as follow:
- Naza Italia purchased two Ferraris from Ferrari SpA.
- When the car was ready to be shipped, Ferrari SpA contacted Box Line United Cargo Link, a cargo company, to bring the car over from Ferrari SpA to the port in Italy(La Spezia) for it to be shipped to Malaysia.
- However, the cars were stolen before they reach the port. This was made known to Naza Italia by Perfect Logistic, the (allegedly by Naza Italia) appointed logistic service provider for Naza Italia in regards to the transportation of the Ferraris from Italy all the way until it reaches the hands of Naza Italia.
- Perfect Logistic Managing Director even sent the translated police report in regards to the theft of the 2 Ferraris to Naza Italia.
Naza Italia sued Perfect Logistic, alleging that Box Line had a master-servant/ agent relationship with Perfect Logistics. And since Perfect Logistics was supposed to oversee the whole transportation of the Ferraris from the moment it is shipped out by the manufacturer in Italy until it was handed over to Naza in Malaysia, Perfect Logistics were responsible to compensate them for the stolen cars as Perfect Logistics’ servant/ agent was in possession of the cars when it was stolen.
However, Perfect Logistics contended otherwise. They argued that Naza Italia appointed Box Line and was never given a routing order for the said cars. They have never taken the cars nor are they appointed logistics providers for Naza Italia. Therefore, they are not responsible for the loss of the cars- it is Box Line they should have sued since there was no master-servant relation between them.
What did the court say?
Long story short, the court allowed Naza Italia’s claim against Perfect Logistic. We shall dive into the longer one below.
Was there a master-servant relationship between the Perfect Logistic and Box Line? The court noted that in order to prove the existence of this relationship, Naza Italia must prove that there exists a fiduciary relationship between Perfect Logistic and Box Line.
In regards to this issue, this was what the court has to say:
“The categories of fiduciary relationship are not closed. Fiduciary duties may be owed despite the fact that the relationship does not fall within one of the settled categories of fiduciary relationships, provided the circumstances justify the imposition of such duties…Thus, it has been said that the ‘fiduciary relationship is a concept in search of a principle. There is, however, growing judicial support for the view that:
“a fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances that give rise to a relationship of trust and confidence. The concept enraptures a situation where one person is in a relationship with another which gives rise to a legitimate expectation, which equity will recognize, that the fiduciary will not utilize his or her position in such a way that is adverse to the interests of the principal. The expectation is assessed objectively, and so it is not necessary for the principal subjectively to harbor the expectation.”
So, was there a fiduciary relationship between the two?
The court says yes. In coming to its decision, the court noted that when the car was stolen, Box Line immediately contacted Perfect Logistics first instead of Naza to request instructions on what should be done. The court held that if there were no master-servant/ agent relationship, Box Line would not have first called Perfect Logistics:
“…The question here is if Box Line was appointed by the plaintiff, why did Box Line contact and request advice from the defendant instead of the plaintiff. Why did Box Line not inform the plaintiff regarding the theft? The plaintiff was only notified by the defendant two days after the theft. This showed that Box Line was the agent of the defendant The question here is, if Box Line was appointed by the plaintiff, why did Box Line contact and request advice from the defendant instead of the plaintiff. Why did Box Line not inform the plaintiff regarding the theft? The plaintiff was only notified by the defendant two days after the theft. This showed that Box Line was the agent of the defendant.”
Therefore, since Box Line was Perfect Logistics’ servant/ agent, Perfect Logistics as the principal is vicariously liable for the acts of its agent i.e. is responsible for the loss of the cars.