On May 20, 2026, Equibit Group Ltd. filed a formal complaint with the Canadian Judicial Council (CJC) against Justice Loretta P. Merritt of the Ontario Superior Court of Justice. The Council acknowledged receipt the following day and assigned file number 26-0478. The complaint concerns Justice Merritt’s endorsement of May 12/24, 2023, which set aside the noting in default (May 17, 2021), the liability judgment of Justice Myers (October 5, 2022), and the damages judgment of $1,744,711 (December 21, 2022).
Equibit sought leave to appeal that decision to the Divisional Court. On October 13, 2023, a three-judge panel (Ramsay, Matheson and Schabas JJ.) dismissed the motion for leave to appeal (2023 ONSC 5623) and awarded $5,000 in costs against the plaintiff. With the ordinary appellate route closed, the Canadian Judicial Council is now the only remaining institutional body that can examine whether the endorsement reflects a standard of factual accuracy and impartiality consistent with public confidence in the judiciary.
The complaint does not ask the CJC to re-try the underlying commercial dispute. It asks the Council to examine whether the endorsement contains a series of clear factual errors and one-sided characterizations that raise serious questions about judicial conduct.
The Core Factual Errors Identified in the Complaint
The complaint lists five specific problems. Each is grounded in the discovery transcripts and the text of the endorsement itself.
1. The claim that Equibit “admitted” fraud is rampant in cryptocurrency
Justice Merritt wrote that “Equibit admits there are many dangerous characters in the cryptocurrency industry and fraud is rampant.”
In cross-examination, when counsel for Sachkov put precisely this framing to Chris Horlacher, the answer was a direct “No.” The endorsement nevertheless treats the proposition as an admission by the plaintiff. This is a classic straw-man: an assertion is attributed to the plaintiff that the plaintiff expressly rejected under oath.
2. Attribution of the “travel to Russia” allegation
The endorsement states that the Statement of Claim alleges Sachkov took the code to Russia and treats this as Horlacher’s positive assertion.
In discovery (lines 198–199 and surrounding questions), Horlacher repeatedly clarified that Sergei himself told the company he had gone to Russia. Horlacher stated he had no independent documents confirming the travel and that whether it occurred was a matter for the court. Whether or not Sergei did, in fact, make this trip is immaterial to the judgment against him for breach of contract. The endorsement converts a reported statement by the defendant into an allegation originating with the plaintiff.
In order to further deny that he had traveled to Russia, Sergei presented his passport containing an entry stamp into the USA on the date of his alleged trip. Justice Merritt took this as proof he did not go to Russia, and Sergei explained that he had actually gone to New York City for an all-expenses-paid job interview that took two weeks to complete – and that he had no recollection of the name of the company that treated him so luxuriously.
In fact, financial records obtained from Sergei during discovery, covering the period in question, show only two charges on it originating from a restaurant in the departure terminal of LaGuardia airport. All other activity on the financial statement was redacted. This is consistent with someone entering the USA under their own identity, switching to an undercover one provided by CSIS, and then traveling on to Russia. The US waypoint was meant to conceal his true port-of-origin upon his arrival in Russia, where the GRU was allegedly looking for him.
3. The Ukraine-invasion explanation for inaction
Justice Merritt accepted that Sachkov was “personally distracted by the Russian invasion of the Ukraine” as part of the explanation for his default.
Sergei Sachkov was noted in default on May 17, 2021. The full-scale Russian invasion of Ukraine began on February 24, 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.
4. The “honest belief the documents were fraudulent”
The endorsement finds that Sachkov held an honest belief the Statement of Claim and subsequent 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.
5. Characterization of the damages as excessive
Justice Merritt treated the quantum as problematic. The damages figure of $1,744,711 was supported by a Chartered Accountant / CPA with extensive cryptocurrency experience and by expert material from Crowe Soberman. No responding expert evidence was filed by the defense on the motion to set aside. Sergei himself admits he thought Equibit “could be bigger than Bitcoin.” The endorsement nevertheless frames the amount as a factor weighing against the plaintiff.
Pattern of One-Sided Framing
Beyond the discrete errors, the endorsement consistently adopts the most favorable interpretation of the defendant’s conduct and the least favorable interpretation of the plaintiff’s.
- Service of the claim and multiple subsequent motion records is acknowledged, yet the defendant’s decision to ignore them is treated as reasonable.
- The plaintiff’s decision not to send a pre-claim demand letter is used against it, while the defendant’s complete failure to make any inquiry is excused.
- Causation doubts expressed by Justice Myers in the damages endorsement are amplified, while the sworn evidence and expert support for the quantum are minimized.
The cumulative effect is that a defendant who was properly served, noted in default, and subjected to two judgments after full motion records is restored to the action on the basis of explanations that contain clear chronological and evidentiary difficulties.
What This Ruling Implies for Future Civil Cases
If left unexamined, Justice Merritt’s endorsement creates a dangerous practical precedent for defendants in Ontario civil litigation.
A defendant who is properly served with a Statement of Claim, who receives multiple subsequent motion records, and who takes no steps to verify or respond can later argue:
- “I believed the documents were fraudulent because the industry is full of unsavory characters.”
- “I was distracted by a geopolitical event that had not yet occurred.”
- “I am unfamiliar with Canadian procedure, even after years of residence and prior interactions with Canadian institutions.”
- “I made no inquiries of any kind, and that is still a plausible excuse.”
Under the reasoning accepted in this endorsement, such explanations can be sufficient to set aside default judgments — even after the plaintiff has invested significant time and cost in obtaining them, and even when the quantum is supported by expert evidence that the defence never challenged.
This standard invites abuse. Sophisticated or well-advised defendants can simply ignore service, wait to see whether a default judgment is obtained, and then move to set it aside with a narrative of honest belief in fraud or personal distraction. Plaintiffs, particularly smaller companies or individuals, will face increased cost, delay, and uncertainty. The policy underlying the Rules of Civil Procedure — that parties who are properly served must respond or face consequences — is weakened.
The fact that a three-judge panel of the Divisional Court refused leave to appeal means this reasoning currently stands. Ordinary appellate correction is no longer available. The Canadian Judicial Council is therefore the public’s last institutional opportunity to determine whether the endorsement meets the minimum standards of factual accuracy and even-handedness expected of a superior court judge.
Comparable Complaints and the Rarity of Meaningful Consequences
Public records of the Canadian Judicial Council show that the overwhelming majority of complaints against federally appointed judges are dismissed at the earliest screening stages. In 2025 alone the Council received 1,399 complaints; 912 were closed by a screening officer and a further 50 by a reviewing member. Only a handful reached review panels, and the sanctions imposed in those cases were typically limited to private measures, public expressions of concern, warnings, or reprimands. Recommendations for removal from the bench remain exceptionally rare in the Council’s history.
Where sanctions have been imposed, they have usually concerned courtroom demeanour, delays in disclosure of errors, or personal interactions rather than a cluster of demonstrable chronological impossibilities, misattributions of evidence, and one-sided factual framing inside a written endorsement that survived a refused leave-to-appeal application. No closely analogous Canadian case involving multiple clear factual errors of this character — each contradicted by the discovery record and the timeline itself — has been identified in the publicly available decisions.
In the United States, federal judges have occasionally withdrawn opinions after counsel identified fabricated citations or misidentified parties, but formal discipline for patterns of factual misstatement in published rulings remains uncommon and is typically handled through internal correction rather than public removal proceedings.
The combination present here — multiple independently verifiable errors of fact and chronology inside a single endorsement, the refusal of leave to appeal by a three-judge panel, and the consequent foreclosure of ordinary appellate correction — appears to stand outside the ordinary run of complaints the Canadian Judicial Council routinely processes. That rarity does not diminish the seriousness of the issues; it underscores why the Council’s review of file 26-0478 matters.
Status of the CJC Complaint
The Canadian Judicial Council has confirmed that the complaint will be reviewed under the Canadian Judicial Council Procedures for the Review of Complaints or Allegations About Federally Appointed Judges (Review Procedures 2026). The file remains open. The Council’s mandate is limited to questions of judicial conduct; it does not sit as an appellate court. Nevertheless, a documented pattern of factual error, chronological impossibility, and uneven treatment falls squarely within the Council’s responsibility to maintain public confidence in the judiciary.
What Readers Can Do
Public scrutiny is one of the few remaining checks when ordinary appellate routes have been closed.
- Write to the Canadian Judicial Council referencing file 26-0478 and requesting a thorough review of the factual accuracy of the May 2023 endorsement.
Email: info@cjc-ccm.ca
Website: https://cjc-ccm.ca - Contact your Member of Parliament and ask that the matter of judicial accountability in cases involving national-security-related civil claims be raised with the Minister of Justice.
- Support the ongoing litigation. The underlying actions against the Attorney General of Canada and related parties continue. Accurate public understanding of how intermediate procedural decisions were reached is part of that process.
The integrity of the justice system depends on the willingness of its officers to state facts accurately and to apply standards evenly. When a judicial endorsement contains multiple demonstrable errors of chronology, attribution, and evidence, when leave to correct those errors is refused by a three-judge panel, and when the only remaining institutional check is the Canadian Judicial Council, the public is entitled to insist that the Council perform its function.
That request has now been made. File 26-0478 is open. The record is clear. The combination of errors documented here appears to have few, if any, direct parallels in the publicly reported history of Canadian judicial conduct proceedings. That is precisely why this complaint deserves careful attention.
The ball is in the CJC’s court, whether they do their duty is up to you.
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