This record forms part of the Equibit Group lawsuit in the Ontario Superior Court of Justice and of the Canadian Judicial Council complaint concerning Justice Merritt’s handling of the Sachkov default.
In 2022, in Court File No. CV-20-00645492-0000, Equibit Group obtained default judgment against Sergei Sachkov for liability and, later, an assessment of damages in the amount of $1,744,711. That judgment was subsequently set aside by Justice Loretta P. Merritt in an endorsement dated May 2023. A three-judge panel of the Divisional Court refused leave to appeal. The factual and chronological difficulties in the endorsement became the subject of a formal complaint to the Canadian Judicial Council (file 26-0478). Four failures stand out with particular clarity.
The Endorsement Treated a Denied Proposition as an Admission
First, the endorsement stated that “Equibit admits there are many dangerous characters in the cryptocurrency industry and fraud is rampant.” In cross-examination, when counsel put precisely this framing to Chris Horlacher, the answer was a direct and unambiguous “No.” The endorsement nevertheless treated the proposition as an admission by the plaintiff. This is a classic straw-man: an assertion the plaintiff expressly rejected under oath is attributed to the plaintiff as a concession.
The Endorsement Misattributed Sachkov’s Own Account to the Plaintiff
Second, the endorsement treated the Statement of Claim as alleging that Sachkov had taken Equibit’s code to Russia, and presented this as a positive assertion by Horlacher. The discovery transcript shows the opposite. Horlacher repeatedly clarified that Sergei himself had told the company he had gone to Russia, that Horlacher possessed no independent documents confirming the travel, and that whether the trip occurred was a matter for the court. Furthermore, Sergei’s ultimate travel destination was entirely irrelevant to his default judgment for breach of contract. The endorsement converted a reported statement by the defendant into an allegation originating with the plaintiff.
The Invasion of Ukraine Could Not Explain a May 2021 Default
Third, the endorsement accepted as a plausible explanation for Sachkov’s default the claim that he was “personally distracted by the Russian invasion of Ukraine.” Sachkov was noted in default on 17 May 2021. The full-scale Russian invasion of Ukraine began on 24 February 2022 — more than nine months later. A distraction that did not yet exist cannot explain a failure to respond that had already crystallized. This chronological impossibility is stated as fact in the endorsement.
An “Honest Belief” With No Inquiry
Fourth, the endorsement found that Sachkov held an “honest belief” that the court documents were fraudulent and that this belief constituted a plausible excuse. In his own discovery evidence, Sachkov acknowledged that he took no steps whatsoever to verify the authenticity of the documents. He did not contact plaintiff’s counsel, did not contact the court, and did not contact police. The endorsement cites case law recognizing that failure to make any inquiry is generally insufficient, then effectively excuses the complete absence of inquiry in this case.
These four failures — misattribution of an admission, misattribution of an allegation, chronological impossibility, and acceptance of a total failure to inquire — form the heart of the complaint (file 26-0478) now before the Canadian Judicial Council. They raise serious questions about factual accuracy and even-handedness in the handling of a default judgment by Justice Merritt that had been obtained after proper service and supported by expert evidence.
Further Reading
- Default Judgment Against Sergei Sachkov
- Default Judgment Overturned
- Complaint Filed with the Canadian Judicial Council Against Justice Loretta P. Merritt
- Reply to Sergei Sachkov’s Defence Filed
