A New Zealand resident has avoided extradition to Australia to face trial over the deaths of more than 350 people.

Maythem Kamil Radhi was allegedly involved in the 2001 smuggling of a boat-load of people from Indonesia and the Australian Government is trying to extradite him to face trial over the humanitarian disaster.

However, the Supreme Court today bought Radhi some more time by accepting his appeal and ruling that the case be referred to Minister of Justice Andrew Little. The judges found Radha faced "compelling or extraordinary circumstances" so it would be "unjust or oppressive to surrender him to Australia before the Minister has had the opportunity to consider the immigration limbo issue discussed in this judgment".

The decision brought tears to not only the eyes of Radhi and his wife - who has name suppression - but also his lawyer Ron Mansfield.

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"We are extremely relieved," Mansfield said about the decision.

"It's a pretty emotional time to be perfectly honest, even though I'm meant to be a hard-nosed criminal defence lawyer. I went to speak to him to tell him we were successful and the words didn't come out and he looked at me and I think he feared the worse.

"I eventually managed to get the words out. I was quite shaken, actually, to be honest."

Radhi had faced a Christmas in custody then extradition to an Australian detention centre for an unknown amount of time.

"If he was unsuccessful he would have been taken into custody, pretty much forthwith and then removed, so it would have been horrible to have to deal with," said Mansfield.

"It was pretty traumatic [for him] and for his family so we're just relieved."

The case will now go before the minister.

However, that decision is likely to take months rather than weeks.

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The boat, known as Siev X (Suspected Illegal Entry Vessel X), was sailing for Christmas Island but sank off Indonesia after taking on water. About 353 men, women and children drowned.

The Australian Federal Police allege Radhi helped the asylum seekers sail to Australia in a leaky boat.

The native-born Iraqi, who lives in Auckland with his family, denies the allegations.

Two other people have already been tried and convicted in Egypt and Australia for the people-smuggling operation.

Maythem Radhi has fought a legal battle over attempts to extradite him to Australia. Photo / Channel 9 Australia
Maythem Radhi has fought a legal battle over attempts to extradite him to Australia. Photo / Channel 9 Australia

In their judgment released today, Justices William Young, Ellen France, Susan Glazebrook, Mark O'Regan, and Sir John McGrath agreed that no explicit consideration was given by the Court of Appeal to Radhi's position if he cannot obtain a visa to return to New Zealand.

"We agree with [Justice] William Young that there is a substantial risk that, if Mr Radhi
is convicted, he will be unable to return to New Zealand. We consider, on the
material before the Court, that if Mr Radhi cannot return to New Zealand, there is a
real risk that he will be subjected to the mandatory detention and immigration limbo
consequences outlined in William Young J's judgment."

Earlier this year the Supreme Court granted leave for appeal to hear whether the Court of Appeal was correct to conclude that Radhi's circumstances did not warrant a reference to the Minister of Justice under the Extradition Act.

The minister has a wider discretionary power under the legislation, not available to the courts, to refuse an Australian extradition request.

Radhi applied to the District Court in February 2015 for an order referring his case to the minister.

The District Court declined his application and subsequent appeals to the High Court and Court of Appeal were made but also lost.

Mansfield had argued that if his client was sent to Australia for more than two years for a trial he would lose his New Zealand residency and be unable to return to his family.

Radhi was living in Indonesia at the time of the sinking, having arrived there in March 2000.

He was subsequently recognised as a refugee under religious persecution grounds by the United Nations High Commissioner for Refugees and put forward for inclusion in New Zealand's annual quota intake of refugees.

New Zealand granted Radhi refugee status, and he and his wife and two children arrived in New Zealand in March 2009. Upon arrival, he was granted a residence permit.

In October 2010, Australian authorities submitted an extradition request
to New Zealand and in 2011 Radhi was arrested.

Legal proceedings have been ongoing since then as he fought the extradition process.