Federal Court File No. DES-14-26 · Attorney General of Canada v. Equibit Group Ltd., Sergei Sachkov and Kartik Patel
Underlying action: Ontario Superior Court File No. CV-20-00645492-0000, Equibit Group Ltd. v. Attorney General of Canada et al.
Related: Statement of Claim Against CSIS · Five Things the OIC Final Report Established
The Attorney General of Canada has applied to the Federal Court for an order that would keep information redacted from the production in Equibit’s CSIS lawsuit from being disclosed. The application is brought under section 38 of the Canada Evidence Act, the national-security disclosure regime. On September 18, 2026, Justice Catherine M. Kane ordered that the amended application be made public, that Equibit Group Ltd., Sergei Sachkov and Kartik Patel be added as respondents, and that the application be served on them.
The descriptions below of what each side alleges are allegations. None of them has been determined by a court.
What the Attorney General Is Asking For
The Amended Notice of Application, dated September 16, 2026 and amended September 18, 2026, is brought under subsection 38.04(1) of the Canada Evidence Act. It seeks an order under subsection 38.06(3) confirming the prohibition of disclosure of information referred to in a notice given to the Attorney General under subsection 38.01(3). According to the application, that notice was received on April 7, 2026, and stated that documents required to be disclosed in CV-20-00645492 may contain sensitive or potentially injurious information.
The application states that the Attorney General, through a delegate, did not authorize disclosure of some of the information redacted in those documents, and that this withheld information is the subject of the application. The grounds pleaded are that disclosure would be injurious to national security and that the public interest in non-disclosure outweighs the public interest in disclosure.
The application also states that:
- an ex parte, in camera hearing is necessary (a hearing in private, with the Crown alone before the judge);
- a public hearing may be necessary; and
- the Attorney General may receive further section 38 notices covering additional documents in the Ontario action, which would become part of the same application.
Justice Kane’s order provides that, if further notices are received on additional documents containing sensitive or potentially injurious information, those documents can be added to this application, subject to any further order or direction of the designated judge.
The Crown’s own application acknowledges that the production in Equibit’s lawsuit contains information the Crown says is sensitive to national security.
What Happens When CSIS Speaks Alone to a Judge?
An ex parte, in camera hearing means the Crown presents its evidence and argument to the judge in private, with no other party in the room to test it. Under the law, a party in that position owes the court a duty of candour: in the words of the Supreme Court of Canada in Ruby v. Canada (Solicitor General), “no relevant information adverse to the interests of that party may be withheld.” The Federal Court has publicly found, more than once, that CSIS and its counsel did not meet that duty.
2013: foreign partners kept from the Court. In X (Re), 2013 FC 1275, Justice Richard Mosley found that CSIS had not disclosed, when obtaining warrants, that it would seek the help of foreign partner agencies through CSEC to intercept Canadians’ communications abroad. He wrote that “the failure to disclose that information was the result of a deliberate decision to keep the Court in the dark,” and that “this was a breach of the duty of candour owed by the Service and their legal advisors to the Court” (paras. 117–118). The Federal Court of Appeal upheld the decision (2014 FCA 249).
2016: an unlawful data program the Court was not told about. In X (Re), 2016 FC 1105, Justice Simon Noël held that CSIS’s retention of “associated data” through its Operational Data Analysis Centre (ODAC) program, running since 2006, was illegal, and that “the CSIS has breached its duty of candour towards the Court by failing to inform it clearly and transparently of its retention program” (para. 7). He asked: “How can the Court properly assume its duties to assess very intrusive warrants when the party appearing in front of it ex parte and in camera does not inform the Court of retention policies and practices directly related to the information the Court allows the CSIS to collect through the warrants it issues?”
2020: likely illegally obtained information, undisclosed. In 2020 FC 616 (public summary), Justice Patrick Gleeson found that CSIS and the Attorney General “admittedly failed to disclose to the Court the Service’s reliance on information that was likely collected unlawfully when seeking warrants, thereby breaching the duty of candour owed to the Court.” He wrote that “this is not the first time this Court has been faced with a breach of candour involving the Service,” and that the circumstances “suggest a degree of institutional disregard for—or, at the very least, a cavalier institutional approach to—the duty of candour and regrettably the rule of law.” The Federal Court of Appeal later allowed the government’s appeal on other questions; the candour finding was acknowledged by CSIS and the Attorney General.
2022: the external review. The National Security and Intelligence Review Agency’s review arising from 2020 FC 616, published June 16, 2022, found that “the warrant process has repeatedly failed to meet these candour obligations,” that “CSIS has not always shared all relevant information” with its own Justice counsel, and that “incidents concerning CSIS’s observance of its duty of candour are almost as old as CSIS.”
Equibit Group’s position is this: the Attorney General is asking the Federal Court to hear the Crown’s case for secrecy in private, with no one present to test it, on behalf of the same institutions the Federal Court has repeatedly found misled it in exactly that setting.
The Federal Court has a tool for this. In section 38 proceedings, designated judges can appoint an amicus curiae, a security-cleared lawyer who sees the secret material and challenges the government’s claims. As Justice Mosley described the court’s practice in a 2015 lecture, the court has “appointed amicus curiae to assist us in examining the contested information and to respond to the arguments of the Attorney General.” A comparable role, the special advocate, exists by statute in immigration security-certificate cases.
Section 38 in Plain Terms
Section 38 of the Canada Evidence Act governs what happens when information that may be “sensitive” or “potentially injurious” to international relations, national defence or national security could be disclosed in a legal proceeding. In plain terms:
- A participant who believes such information will be disclosed must notify the Attorney General (s. 38.01). Once notice is given, the information cannot be disclosed unless the Attorney General authorizes it or the Federal Court orders it (s. 38.02).
- If the Attorney General does not authorize disclosure, the matter goes to the Federal Court, not the court hearing the lawsuit (s. 38.04).
- A designated Federal Court judge decides. If the judge finds disclosure would be injurious, the judge weighs the public interest in disclosure against the public interest in secrecy and may order disclosure, disclose a summary or a part with conditions, or confirm the prohibition (s. 38.06). The Attorney General is asking for the last of these.
- Much of the process can take place in private, and the Crown can make submissions without the other parties present (s. 38.11).
Full text: Canada Evidence Act, sections 38 to 38.16 (Justice Laws Website).
The Sequence
The record in CV-20-00645492 unfolded in this order:
- On August 12, 2020, Equibit Group Ltd. issued and served its Statement of Claim against the Attorney General of Canada, alleging unlawful targeting of the company by CSIS and others.
- In October 2020, the Attorney General filed a Notice of Intent to Defend, late.
- On October 1, 2021, more than a year after service of the claim, the Attorney General filed its Statement of Defence, late, denying that CSIS had knowledge of Equibit.
- On July 25, 2025, Crown counsel wrote that the time and expense needed to protect CSIS information, “including potentially through an application to the Federal Court pursuant to section 38 of the CAE,” was “out of proportion to the costs of defending the action,” and that “an exception is being made” (letter, p. 1).
- On examination for discovery, a CSIS witness confirmed that CSIS has knowledge.
- The Office of the Information Commissioner’s final report of April 15, 2026, on Chris Horlacher’s access request to CSIS, found that CSIS had improperly withheld information from responsive records. CSIS conceded the point and released some previously withheld information on March 3, 2026. Other information remains withheld under exemptions the OIC accepted, including information obtained in confidence from a foreign state and information CSIS said could harm ongoing investigations. See Five Things the OIC Final Report Established That Contradict CSIS’s Position and The ATIP and OIC Experience.
- By a notice of application dated September 16, 2026 and amended September 18, 2026, the Attorney General applied to the Federal Court under section 38 for an order keeping the redacted information in the production from being disclosed. That is the section 38 route the Crown had called “out of proportion” fourteen months earlier.
Equibit Group’s position is that the sequence speaks for itself.
Place in the Equibit Lawsuit
DES-14-26 is a separate Federal Court proceeding, but its subject is the production in Ontario Superior Court File No. CV-20-00645492-0000. The Federal Court will decide whether the redacted information stays redacted; the Ontario action continues with the merits. The court has made the amended application and Justice Kane’s order public. Equibit Group will report on further public steps in DES-14-26 as they occur.
Further Reading
- Statement of Claim Against CSIS: The Opening Shot in the Fight for Accountability
- Attorney General Files Notice of Intent to Defend in CSIS Lawsuit
- Attorney General of Canada Finally Files Statement of Defence – Over a Year Late
- CSIS Forced Into Discovery: A Hard-Won Milestone
- Five Things the OIC Final Report Established That Contradict CSIS’s Position
- The ATIP and OIC Experience
- CSIS and the Canadian Entrapment Factory
- CSIS Secret Federal Court Warrants and Duty of Candour
