Bethany Smith said Friday that the ruling is a \Bethany Smith said Friday that the ruling is a "great relief." (CBC)

The Federal Court says the refugee board must reassess the case of a lesbian soldier who deserted from the U.S. army and fled to Canada, saying the board made mistakes in rejecting her bid to seek refugee status.

Judge Yves de Montigny said the Immigration and Refugee Board (IRB) erred in determining whether Pte. Bethany Smith, also known as Skyler James, had an objective basis for her fear of persecution.

"My first reaction was 'Oh my god, yes!'" said Smith Friday in Ottawa, where she now lives. "For now, it's like a great relief."

Bethany Smith's story

Bethany Smith said other soldiers found out she was a lesbian after she was spotted holding hands with another woman at a local mall.

After that, she claims she was constantly harassed.

Smith told CBC News Friday how a certain soldier would pick her up, shake her and throw her to the ground as other soldiers laughed and the supervising sergeant watched.

"He didn't really do anything to stand up for me, he just went with it."

She also received notes containing messages such as: "There's no room for your kind here." The one that prompted her to leave was one where the letter writer threatened to beat her to death as she slept.

At the time, she was about to be sent to Afghanistan.

"I was afraid of people who were supposed to be guarding my back because they were already threatening me and we were in our home country."

Smith worries that if she were sent back to the U.S., she would undergo court martial in the presence of her peers from the same duty station who had been harassing her. Afterward, she could be put back into the same unit to finish the term or face prison time and a discharge.

Smith currently works at a call centre in Ottawa.

Smith fled to Canada in September 2007 from a U.S. army base in Fort Campbell, Ky. She applied for refugee status in October 2007, saying she was harassed and threatened by fellow soldiers over her sexual orientation and feared that her life would be in danger if she were deported and returned to the army.

The IRB rejected Smith's claim in February 2009. One of the reasons the board cited for rejecting her claim was that Smith had not done enough to seek protection from her own state and did not go to higher-ranking officials for help. Smith had testified that she felt senior officials were "in on it."

De Montigny said the IRB should have taken into account "the particular environment" an applicant finds themselves in.

"It is clear that in the army reigns an atmosphere of unconditional obedience to the hierarchy," de Montingy wrote. "The board member did not seem to be sensitive to this special context."

De Montigny said the IRB also erred by concluding that the beating death of a private in 1999 at the same Kentucky army base where Smith was serving, which was believed to have been motivated by rumours the victim was gay, was an isolated incident.

De Montingny also rejected the IRB's finding it was unlikely Smith would be punished for desertion because 94 per cent of deserters are dealt with administratively.

He ruled that that does not "fall within the specialized knowledge of the board."

Smith's lawyer, Jamie Liew, said the decision provides direction to the next immigration and refugee board to hear the case.

"It was a clear decision and it gives us hope that another adjudicator could look at this in a more nuanced way," she said.

However, she said it is hard to say what Smith's chances will be before the next board.

Other U.S. deserters seeking refugee status in Canada have failed in their appeals to Canadian courts, and some are serving prison terms after being deported. However, Smith and Liew argue that Smith's case is different, as she fled due to persecution based on her sexual orientation. Most other war deserters said they fled because they opposed the war.

With files from The Canadian Press