A man who faces people-smuggling charges in Australia would face oppression and possible "indefinite detention" if sent back across the Tasman, the Supreme Court has heard.

Iraqi-born Maythem Kamil Radhi had a warrant issued for his arrest by an Australian court in 2011, alleging his involvement in the Siev X, a small and overcrowded boat full of refugees that sank off the coast of Indonesia in 2001 while bound for Australia.

The sinking cost the lives of 353 people, 146 of which were children.
One man, Khaleed Daoed, served a nine-year prison sentence in Australia over the Siev X and another, Abu Quassey, was sentenced to seven years in an Egyptian jail.

Radhi was granted UN refugee status before the sinking and has lived in New Zealand since 2009 with his wife and children.

Police allege Radhi was in charge of passenger fares for the Siev X and helped them board the vessel.

He has previously lost appeals in the district, high and appeal courts and his case was heard in the Supreme Court in Wellington on Wednesday.

His lawyer, Ron Mansfield said his client was a mechanic and panelbeater who has a settled life in New Zealand.

"Sending him to Australia would be oppressive," Mr Mansfield said.

"There would be the risk that if a trial there did not happen within two years, he would not be able to come back to New Zealand under our visa laws."

Moving Radhi's family to Australia while awaiting a trial was not something he or his family wanted, Mr Mansfield said, and there was also the chance Radhi would fail a "character test" and become an unlawful non-resident in Australia.

"There is every chance Mr Radhi would be in immigration limbo.

"He may be in indefinite detention and this is a flagrant breach of his human rights."

The lawyer for the Commonwealth of Australia, Mark Lillico said while it is true asylum seekers have been detained for lengthy periods, the assertion that Radhi was a "real risk" in terms of detention was overstated.

"We are talking about a future event... we say the risk of oppression is not clear."

Mr Lillico said the Australian and New Zealand ministers of justice can still become involved in Radhi's case.

The Supreme Court judges reserved their decision.