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Foreign Company with No Alberta Presence Cannot Avoid Occupational Health and Safety Charges – Even Where Improperly Served

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Foreign Companies doing business in Alberta are not immune to answering charges regarding workplace safety, even where the foreign entity itself has no presence in the province.

The majority of the Alberta Court of Appeal has ruled that the Chinese employer of two oil sands employees who were killed in a workplace accident in 2007 must face trial for alleged safety violations.

Sinopec Shanghai Engineering Company Ltd., a Chinese corporation, was retained by a Canadian oil and gas company to construct storage tanks at an oil sands extraction facility in Fort McMurray. Since the Canadian oil and gas company wished to deal with a Canadian entity, Sinopec Shanghai incorporated a subsidiary, SSEC Canada Ltd. On April 24, 2007 an accident occurred at the facility, which resulted in the death of two employees. Following an investigation, the Canadian oil and gas company, SSEC Canada and Sinopec Shanghai were all charged with violating sections of Alberta’s Occupational Health and Safety Act.

In order to trigger the jurisdiction of the Provincial Court of Alberta over the defendants, each corporation had to be properly served with the Information in Alberta. Although the Canadian oil and gas company and SSEC Canada have a presence in Alberta, Sinopec Shanghai had no employees and little effective presence. A process server served Calgary resident, Helen Wang, with the Informations (charging documents) for both SSEC and Sinopec Shanghai. Ms. Wang was an employee of SSEC. While Ms. Wang accepted service of SSEC’s Information, she did not accept the Information relating to Sinopec Shanghai. She was never asked what she did with the paper, nor was she asked whether she advised any representative of Sinopec Shanghai that service been attempted. However, a lawyer for Sinopec Shanghai made a conditional appearance to contest service of the Information.  While the dissenting reasons by Justice Slatter concluded that the criminal law recognizes conditional appearances to contest service, the majority of the Court disagreed.

While the majority of the Court of Appeal agreed that the service on Ms. Wang was ineffective, they noted the involvement of Sinopec Shanghai’s lawyer. The majority preferred the reasoning of the Ontario Court of Appeal to the effect that a distinction is to be made between matters that relate to jurisdiction of a court to try an offence and those that related to procedural defects in service.  In this case, service was curable because counsel for Sinopec Shanghai had made an appearance before the Provincial Court to argue that service was not effective. Sinopec Shanghai’s appearance, through counsel, resulted in its attornment to the jurisdiction of the Provincial Court, notwithstanding counsel’s protestations otherwise.

Accordingly, international organizations that do not have a presence in Alberta but conduct business here despite limited presence will not be able to avoid potential responsibility for workplace safety violations.

As a result of the strong dissenting reasons, this case may end up at the Supreme Court of Canada. Stay tuned.

R. v. Sinopec Shanghai Engineering Company Ltd., 2011 ABCA 331