Justice Robert Dobson, hearing challenges from the woman in the High Court at Wellington, said in a ruling her not being allowed to know what she was accused of was "an anathema to the fundamental concept of fairness", but was nonetheless what the law provided for.
High-profile barrister Deborah Manning has compared the case with that of former client Ahmed Zaoui, a refugee who successfully challenged secret claims he was a security risk to eventually become a citizen in 2014.
"The clear parallel [with Zaoui] is the use of classified information to seriously impact on the rights of an individual. The use of classified or secret information cuts across centuries of common law which says we have the right to know what we are accused of, and by whom," she said.
Manning said she hoped a detailed summary of advice behind the cancellation would be released, as was established with Zaoui, that would allow its claims to be tested.
"Often what can happen is a mystique is put over classified information. When you start using phrases like 'national security' and 'terrorism', people think it's special knowledge and should be left to the experts: But the information is far more mundane," she said.
Both Dunne and Chris Finlayson, Attorney-General and minister responsible for New Zealand's intelligence services, declined the opportunity to comment on the case citing the ongoing legal action.
Justice Dobson's ruling on the woman's unsuccessful challenge to the use of secret information in court gave leave for her to file an appeal of the cancellation by Wednesday.
In a revised ruling released this morning, Justice Dobson said he received a formal request for name suppression on April 21, a week after his ruling naming her had initially been published and publicised by the courts with a press release.
Justice Dobson granted the request, but noted "there will inevitably be reduced utility in anonymising judgements in the proceedings given the period in which the judgment, as issued, has been available".
The woman at the centre of the cases, who has represented herself at proceedings, has not responded to numerous requests for comment from the Herald during the past week.
Her connection to New Zealand, beyond citizenship and the now-cancelled passport, are unknown and a spokesman for Dunne cited privacy concerns in declining to answer question about the extent of local links.
Passport cancellation is a rare move and, according to Internal Affairs' annual reports, the department has exercised the power only 12 times in the past four years.