Terra Firma Development Corporation Limited (Re)

Terra Firma Development Corporation Limited (Re)

The BIA's stay on remedies upon filing of a proposal (s.69.1) operates to stay the MGA's 'oldest first' allocation and municipal tax-sale remedies in the proposal context; no constitutional inoperability was found because the BIA's general stay, not paramountcy, resolves the conflict; the six‑year lien expiry in s.133(7) MGA is tolled during the proposal; the stay will not be lifted for West Hants except as to six specified lots for which the trustee consents and which likely lack equity; the proposal is approved as calculated to benefit creditors.

Citation
2026 NSSC 30
Parties
Debtor (proponent of Proposal): Terra Firma Development Corporation Limited; Municipal Creditor (respondent): Municipality of West Hants; Proposal Trustee: MNP Ltd.; Intervener (not Appearing): Attorney General of Nova Scotia; Intervener (not Appearing): Attorney General of Canada
Court
Supreme Court of Nova Scotia
Jurisdiction
Canada
Judgment Date
27 January 2026
Procedural Posture
Bankruptcy and Insolvency — Proposal Approval and Related Stay Application / Decision on Proposal Approval, Constitutional Declaration Request and Application to Lift Stay of Proceedings
Outcome
Proposal approved; application to lift stay dismissed except as to six specified lots; no constitutional declaration of MGA inoperativeness granted; MGA remedies are stayed by operation of the BIA; s.133(7) MGA lien expiry tolled during the proposal.
Legal Topics
Proposal Approval, Stay of Proceedings, Constitutional Paramountcy, Municipal Tax Lien Priority, Limitation Tolling
Source Language
English
Bankruptcy and Insolvency Municipal Law Constitutional Law Taxation Proposal Approval Stay of Proceedings Constitutional Paramountcy Municipal Tax Lien Priority +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 5 Authorities cited 14 Party arguments 2 Amounts and remedies 9
Sign in to unlock

Parties

Terra Firma Development Corporation Limited

Debtor (proponent of Proposal)

Municipality of West Hants

Municipal Creditor (respondent)

MNP Ltd.

Proposal Trustee

Attorney General of Nova Scotia

Intervener (not Appearing)

Attorney General of Canada

Intervener (not Appearing)

Procedural Posture

Bankruptcy and Insolvency — Proposal Approval and Related Stay Application / Decision on Proposal Approval, Constitutional Declaration Request and Application to Lift Stay of Proceedings

Legal Issues

  1. 1 Whether provisions of the Municipal Government Act (MGA) requiring 'oldest first' allocation of tax receipts conflict with the Bankruptcy and Insolvency Act (BIA) in a proposal context
  2. 2 Whether the MGA provisions are constitutionally inoperative by reason of federal paramountcy
  3. 3 Whether the BIA stay (s.69.1) suspends municipal remedies including allocation and tax sale processes

Ratio Decidendi

The BIA's stay on remedies upon filing of a proposal (s.69.1) operates to stay the MGA's 'oldest first' allocation and municipal tax-sale remedies in the proposal context; no constitutional inoperability was found because the BIA's general stay, not paramountcy, resolves the conflict; the six‑year lien expiry in s.133(7) MGA is tolled during the proposal; the stay will not be lifted for West Hants except as to six specified lots for which the trustee consents and which likely lack equity; the proposal is approved as calculated to benefit creditors.

Court Disposition

Proposal approved; application to lift stay dismissed except as to six specified lots; no constitutional declaration of MGA inoperativeness granted; MGA remedies are stayed by operation of the BIA; s.133(7) MGA lien expiry tolled during the proposal.

Orders

  • Proposal of Terra Firma Development Corporation Limited approved.
  • Application by Municipality of West Hants to lift the stay of proceedings dismissed except insofar as the stay is lifted as to six specified lots identified by the Trustee.