Grafton Connor: service on the Clerk is sufficient service

A claims bar date is a promise to everyone who met it. This is what it costs to keep.

Where the case stood

Ten Nova Scotia entities — Grafton Argyle Property Partnership, Bedford Investments Limited, T.L.B. Holdings Limited, Jack Friday's Limited, Grafton Street Restaurant Limited, 4625239 Nova Scotia Limited, 1130482 Nova Scotia Limited, Cornwallis Properties Limited, Shoreline Holding Company Incorporated and Shoreline Investments (SIL-Q) Limited — obtained an initial order under section 11 of the CCAA in the Supreme Court of Nova Scotia on August 20, 2025. MNP Ltd. was appointed monitor, proceedings were stayed to August 29, and the court granted a $150,000 administration charge and a $100,000 directors' charge, per Brief of Law of the Monitor, July 10, 2026, para. 6 and Initial Order, August 20, 2025.

The proceeding then ran the ordinary course, in ordinary steps. A refinancing and investment solicitation process was approved on October 17, 2025 and later terminated. A claims process was approved on December 19, 2025, with a bar date of January 19, 2026. Interim financing of up to $400,000 came from Libra Finance Company Inc. in late January. A plan of compromise and arrangement was filed February 12, amended March 23 to increase the distribution to The Toronto-Dominion Bank on its secured claim, approved by creditors at a meeting on March 24 by a vast majority in both number and value, and sanctioned on April 10, 2026, per Brief of Law, July 10, 2026, paras. 16–17, 25–26, 34–36, Claims Process Court Order, December 19, 2025 and Sanction Order, April 10, 2026.

That should have been the end of it. Instead the distribution is frozen and the monitor is arguing constitutional law.

What the municipality did, and did not do

The monitor's account of notice is exhaustive, which is the point of it.

Paragraph 38 of the initial order permitted the monitor to give notice by ordinary mail, courier, personal delivery or electronic transmission to creditors at their addresses as last shown in the debtors' records. Notice of the initial order was published in local news outlets on August 25, 27, 28 and 29 and again on September 2, 2025; posted to the monitor's website on August 27; and mailed the same day to "Halifax Regional Municipality – Property Taxes" at the municipality's PO Box, per Brief of Law, July 10, 2026, paras. 7–10.

The claims process order went further. It required the monitor to send the proof of claim form by email or courier to every creditor in the debtors' books within two business days and to publish notice in local media and on its website — and then provided that "the delivery of this Order to the Claimants as set forth in the previous paragraph shall constitute good and sufficient service and no other notice service needs to be given or made", per Brief of Law, July 10, 2026, para. 18.

On December 22, 2025 the monitor sent it to `HRMCollections@halifax.ca`, addressed to Halifax Regional Municipality – Property Taxes, and received an automatic reply confirming receipt. Notice of the claims process with the bar date was published in local outlets the same day. HRM separately acknowledges receiving a package containing the order, though addressed to its policing division, per Brief of Law, July 10, 2026, paras. 19–21 and Notice to Creditors, December 22, 2025.

Then the fact the whole motion has to survive. On January 5, 2026 — a fortnight before the bar date — HRM filed a proof of claim. Not for property taxes. For extra duty police services, unpaid overtime, $16,409.22. It named Halifax Regional Municipality as claimant, gave a named officer as the contact person, and listed as her email address the very address the monitor had used for the property tax notice, per Brief of Law, July 10, 2026, paras. 22–24.

The monitor told the court about the gap before anyone voted. Its Fifth Report of February 16 expressly reported receiving a claim from HRM for police services and none for municipal property taxes, so that HRM would be time barred in that regard. The plan filed four days earlier expressly provided for the compromise of HRM's property tax claim if unproven, per Brief of Law, July 10, 2026, paras. 26, 28, Fifth Report of the Monitor, February 16, 2026 and Plan of Compromise and Arrangement, February 12, 2026.

There was one more chance, and it is the small detail that does the most damage. On March 17, 2026 a title search invoice showed one of the debtors' properties was to be sold for unpaid fees of $117.00. The monitor emailed the same HRM contact to confirm no sale would proceed given the stay. She replied on March 23 asking which assessment numbers were affected; the monitor answered the same day and asked again for confirmation. Nobody at HRM replied — and nobody made any claim about property taxes, per Brief of Law, July 10, 2026, para. 33 and Seventh Report of the Monitor, May 21, 2026.

HRM received the meeting order and the plan on March 6 and did not attend the creditors' meeting on March 24. It never asked to be added to the service list. Thirteen days after the plan was sanctioned, on April 23, it wrote to say the property taxes remained owing and continued to constitute statutory first-priority liens against the properties, per Brief of Law, July 10, 2026, paras. 31, 35, 37, 67 and Meeting Order, March 4, 2026.

The monitor's counsel replied on April 28 that the claim was barred. On June 5, 2026 HRM moved for an order reversing the extinguishment of its pre-filing property tax claims and granting leave to file a late and additional proof of claim, per Brief of Law, July 10, 2026, paras. 38–39 and Notice of Motion, May 21, 2026.

As of the monitor's brief, HRM still had not filed a proof of claim for property taxes at all.

The cost of the delay, in one order

On June 12, 2026 the court stayed the distribution. The monitor's own explanation of why is the clearest statement of what is at stake: the amount of any tax claim is already contested, litigation would drag, and out of caution the monitor should not make the distribution contemplated by the plan while HRM's claim is unresolved, per Brief of Law, July 10, 2026, para. 70 and Order Staying Distribution, June 12, 2026.

Every creditor who filed on time is waiting. So are four who filed late.