A West Vancouver designer walked into court last year holding minority stakes in two luxury residential projects. The developers wanted those shares erased. Justice G.C. Weatherill ruled the shares stay, and the reasoning matters more than the outcome.

The dispute centered on what lawyers call Project-Specific Entities, corporate shells created solely to hold title to a single development. In this case, two adjacent custom builds in West Vancouver, where detached homes routinely clear $1.8 million. Arman Dehghani, operating through a holding company, had been issued shares in both PSEs in exchange for his design concept. The relationship later collapsed. The developers, now hostile, filed consolidated petitions arguing the shares should be cancelled because Dehghani never completed the full architectural scope.

"Fully paid" is a shield

Under Section 70 of the B.C. Business Corporations Act, shares must be issued as "fully paid" when the agreed-upon consideration is received. Once that box is checked in the central securities register, the shares become a property right. The developers tried to treat this as contract law, arguing that because services were incomplete, consideration had failed. The court applied corporate law instead.

The distinction is surgical. In contract disputes, partial performance or breach can void obligations. In corporate law, once a board resolves that shares are fully paid and records them as such, the company cannot unilaterally undo the issuance. What matters is whether the consideration existed at the moment of issue, not whether the shareholder kept their promises later.

Justice Weatherill ruled the shares were issued for past services, the design concept itself, not for the promise of future architectural work. That made them fully paid at issuance. The developers had treated the design concept as a deliverable with ongoing obligations attached. The court treated it as intellectual property provided upfront, distinct and complete. One reading sees a consultant. The other sees a partner who contributed an asset.

The developers' failure was documentation. No Shareholders' Agreement. No vesting schedule tying ownership to project milestones. No repurchase clause triggered by early departure. Without those mechanisms, the statutory default applied: shares issued and recorded as fully paid cannot be clawed back because a business relationship soured.

The structure protects, until it doesn't

Winning this case does not make Dehghani whole. He now holds minority stakes in private companies where the majority owners are openly hostile. Those shares cannot be sold without majority consent, and forcing a buyout requires an oppression claim, a separate, expensive proceeding with its own threshold. The court did not award the shares because equity was fair. It awarded them because the developers never drafted the documents that would have let them take them back legally.

The risk cuts both ways. Service providers who take equity in PSEs often assume their sweat counts as consideration and their stake is safe. It does if shares are issued for work already done. It isn't if shares vest over time and the provider leaves early. Under the BCBCA, what appears in the register and whether the mechanics were followed is what counts, not whether the arrangement feels fair.

Real estate developers routinely issue equity to architects, designers, and consultants to align incentives and preserve cash. The trade works when the documents treat ownership as conditional and spell out the conditions. Reverse vesting. Milestone-based releases. Repurchase options at departure. This case will not stop developers from using equity-for-services structures. It will force their lawyers to draft them correctly. Once the central securities register says "fully paid," the burden shifts to the person trying to undo it. The developers in West Vancouver learned that the expensive way.