Executive Summary: Key Legal and Evidentiary Issues

• Application focused on whether a 4.5-year delay justified dismissing the Commission’s petition for want of prosecution under Rule 22-7(7) SCCR.

• Evidence from Renee and Frank confirmed $95,000 in transfers, grounding an “undervalue benefit” and potential forfeiture under ss. 164.09, 164.10 and 164.13 of the Securities Act.

• The court held the Commission’s delay to be inordinate and partly inexcusable, particularly from April 2022 to June 2025 after meaningful settlement efforts had stalled.

• Frank’s evidence emphasized non-litigation prejudice—health decline, anxiety, work limitations, and marital strain—rather than any loss of ability to defend the claim.

• Strong public interest in securities enforcement and compensating investors outweighed delay-based concerns in the overall interests-of-justice analysis.

• The application to dismiss for want of prosecution was refused, allowing the Commission’s petition to proceed, with each party ordered to bear its own costs.

Background and enforcement context
Renee Penko was sanctioned by the British Columbia Securities Commission in 2016 for unregistered trading and illegal distributions in a Ponzi scheme, resulting in a disgorgement order of $155,000 under s. 161(1)(g) and a $40,000 administrative penalty under s. 162 of the Securities Act. The disgorgement amount is intended to be available to investors who suffered pecuniary loss. The order was registered in the Supreme Court of British Columbia, but collection efforts against Renee were largely unsuccessful. After Renee assigned herself into bankruptcy in 2019, the Commission opposed her discharge and continued its enforcement efforts in that separate bankruptcy proceeding.

Claim against Frank Penko and statutory basis
In March 2020, amendments to the Securities Act empowered the Commission to pursue family members who received property at less than fair market value from a person subject to a disgorgement order. Under s. 164.09, a family member who received an “undervalue benefit” can be made jointly and severally liable to the Commission, and under s. 164.10, “claimable property” transferred to a family member can be forfeited. Section 164.13 allows the court to refuse, limit, or condition forfeiture where it would clearly not be in the interests of justice or where specific relief criteria are met. Relying on these provisions, the Commission filed a petition on December 4, 2020 against Renee’s husband, Frank Penko, seeking to hold him jointly and severally liable for the amount corresponding to an alleged $95,000 undervalue benefit and to forfeit the $95,000, or its proceeds, to the Commission.

Facts underlying the alleged undervalue benefit
The Commission’s petition recounted Renee’s earlier subpoena-to-debtor testimony that she administered her late father’s estate, which held roughly $128,000, and that she transferred $20,000 and then $75,000 from the estate account to Frank in June 2016 to support his interests and into his personal bank account, for a total of $95,000. The Commission alleged Frank gave no consideration for these transfers and that they occurred after Renee had been found liable for securities contraventions, though before sanctions were imposed. In January 2022, Commission counsel examined Frank, and he admitted receiving the $95,000 from Renee and was questioned about how he spent the money and what assets, if any, remained. The evidence suggested the original cash had been dissipated, leaving some uncertainty over what specific property, if any, could now be targeted for forfeiture. Frank had not filed a response to petition, so his intended defences or any request for relief from forfeiture under s. 164.13 remained unknown.

Delay, settlement efforts and the want of prosecution application
After service in December 2020, counsel agreed not to set the petition for hearing while active settlement discussions were underway, and in 2021 they exchanged several proposals. The January 2022 examination of Frank and his subsequent production of documents effectively completed the Commission’s core evidence gathering, placing it in a position where it could have sought a hearing. However, formal progress then stalled. Only sporadic without-prejudice settlement exchanges occurred in 2023 and 2024, while the Commission focused on contesting Renee’s discharge in bankruptcy. In June 2025, Frank applied to dismiss the petition for want of prosecution under Rule 22-7(7) SCCR. The court applied the Giacomini framework: first asking whether the delay was inordinate, second whether it was inexcusable, and third whether, despite such delay, the interests of justice favoured allowing the proceeding to continue. The judge held that the overall 4.5-year delay was inordinate and that the segment from April 2022 to June 2025—after settlement had essentially reached an impasse—was inexcusable, as the Commission’s focus on Renee’s bankruptcy did not practically prevent it from advancing the petition against Frank.

Prejudice, public interest and outcome
On the interests-of-justice assessment, Frank did not show specific litigation prejudice such as lost witnesses or destroyed documents that would impair his ability to defend the claim, especially given the admissions already obtained regarding the $95,000 transfers. His evidence instead highlighted the strain on his physical and mental health, his work capacity, and his marriage, which the court accepted as genuine but only partially supported by an older and largely self-reported medical opinion. Balanced against this were the strong public-interest features of the case: the underlying disgorgement order reflected funds obtained or loss avoided through serious securities contraventions, and any recovery under the petition would be available to compensate defrauded investors. The court also considered that the Commission’s claim appeared at least arguable on the existing record and was not clearly bound to fail. Weighing all factors—the inordinate, partly inexcusable delay; the absence of concrete trial prejudice; the personal impact on Frank; and the significant public interest in securities enforcement—the court refused to strike the petition. The British Columbia Securities Commission emerged as the successful party on this application, but because of its inordinate delay the court directed that each side bear its own costs, and no new damages or determinable monetary amount was ordered in the Commission’s favour in this decision.