The Canadian government wants the Federal Court to throw out a $3.5-million lawsuit alleging that for 11 years it wrongly denied the wife of a convicted hijacker permanent residency.

Elzbieta Paszkowski, who now lives in Edmonton with her husband Ryszard and their children, says her case was improperly handled by immigration officials, and that she deserves compensation for the loss of the right to travel, loss of income and loss of education she suffered during that period.

Her lawyer, Graham Price, says the officials considered the status of her husband – whom she married three months after she arrived in Canada in 1989 – and shouldn't have.

"The position she takes is that her application did not include her husband," he said outside court Tuesday. "She didn't seek landing for him, and therefore his situation should not have been tied to her application for landing."

Before 1993 – Elzbieta Paszkowski applied for permanent residency in 1990 – the criminal past of one spouse halted the application of the other until the offending mate left the country.

In 1993, the law changed to allow spousal applications to be considered separately. Price argued before Federal Court Justice Richard Mosley that immigration officials should have informed her of the change.

The lawyer for the federal government says there was no deliberate attempt to stall her application, and that officials worked in good faith to deal with an "unprecedented" case.

"Legislation sets up checks and balances to ensure the security of the Canadian people – even if that means putting someone's landing application [on hold] for a long time," federal lawyer Brad Hardstaff said. "Not only was [the immigration official] not acting in bad faith, but evidence is that he tried to do everything to solve a really bad situation fraught with security concerns."

Elzbieta Paszkowski became a landed immigrant in 2001 and both Paszkowskis became Canadian citizens last year.

Ryszard Paszkowski hijacked a plane in 1982, defecting from Poland to West Germany. Germany pardoned him for the crime in 1997.

Paszkowski came to Canada in the 1980s and claimed he had worked as a spy for CSIS, Canada's spy agency, because they promised him citizenship.

CSIS has denied his allegations, saying he was only a "contact" for a couple of years.

Mosley has reserved his decision.