Witty - if an application is denied, you and your sponsor will be advised in writing of the reasons. Your wife/sponsor will receive additional information including instructions on how to file an appeal. This is a time-bounded process, she will have 30 days from the date of the notice of the denial to file the notice of appeal.
You may have to wait as much as a year for the first opportunity to present the reasons why the denial reasons should not be allowed to stand, before an Alternate Dispute Resolution (ADR) panel. In the meantime, your application file and GCMS notes will be sent to your wife, so she has access to everything that happened when the file was processed, and why the officer decided to deny the application. She can hire a representative such as a lawyer to represent her, who will guide her through the process. If the panel hears the reasons and accepts them, then there will be no need for a full hearing. If the ADR is not successful, you may have to wait another year for the full appeal hearing before a panel member of the Immigration and Refugee Board. At this time, your wife/her representative may present all the evidence available to try to prove you have a genuine relationship. If the judge accepts the evidence, the appeal is allowed and KG is directed to continue processing the file. If not, the appeal is dismissed, and then she will have to decide if she wishes to pursue a judicial review of the reasons for the dismissal. A judicial review request must present reasons why the decision to dismiss was unfair or unlawful, or else it will not succeed.
Please note that only your wife can make the decision and application to appeal. You as the applicant have no standing before the Minister. Your wife can call you as a witness only, to clarify matters such as your background and what happened at your interview. An appeal is a hearing "de novo", that means you are free to present evidence to the IRB judge that the immigration officer who refused your application did not have at the time. Take note, however, than anything that happens AFTER a denial is given less "weight" by the judge than anything that happened before.