Irina Koulatchenko's appointment to a position with the Financial Transactions and Reports Analysis Centre of Canada was revoked in February 2012.
The director of FINTRAC refused to issue a Top Secret security clearance to Koulatchenko, revoked her Secret security clearance, and revoked her Reliability Status, meaning she could not be employed by the agency.
A Canadian Security Intelligence Service security assessment noted that Koulatchenko has dual Canadian and Russian citizenship, and had several social interactions with a Russian diplomat who was friends with her ex-fiance.
The CSIS report said she had social interactions with another Russian diplomat she met by chance at a Cirque du Soleil show and also attended one other social event with him at the Russian Embassy.
It also said when asked what she would do if she was ever approached for information, Koulatchenko had responded that she would "mostly likely say no."
The report said Koulatchenko then clarified her reply by adding that while she might not say no immediately, she might instead "tell her supervisor in case she could be used as a double agent."
Justice Catherine Kane ruled this week that the decisions denying and revoking the security clearances were administrative decisions and Koulatchenko was owed a duty of procedural fairness.
Although the scope of that duty in the circumstances was minimal, Kane ruled it was not met by the director of FINTRAC.
The decisions to deny the Top Secret status and revoke the Secret and Reliability Status must be quashed and sent back for re-determination by the director, and Koulatchenko given some opportunity to respond to the information, Kane ruled.
"It is possible that the director may reach the same result following re-determination, but the applicant must have some opportunity to address the security concerns disclosed," Kane stated.
FINTRAC is an independent agency reporting to the Minister of Finance that was established to facilitate the detection, prevention and deterrence of money laundering and the financing of terrorist activities.