PERTH man Charles Zentai says he is overwhelmed by a Federal Court ruling overturning his extradition on war crimes charges.

Home Affairs Minister Brendan O'Connor's had ordered that he be extradited to Hungary over the murder of a Jewish teenager during World War II.

The court found Mr Zentai, 88, was not liable for extradition and it was beyond Mr O'Connor's jurisdiction to make the order.

Judge Neil McKerracher said the minister had failed to consider whether it would be "oppressive and incompatible with humanitarian considerations" to extradite Mr Zentai given his age, ill-health and the potential severity of punishment.

"It was fantastic," Mr Zentai said outside the court. "Something perhaps I haven't felt before, not for a long time anyhow."

He said he and his family had been "through hell" in the seven years since the Simon Wiesenthal Centre alleged he had killed Peter Balazs in Budapest in 1944.

His son, Ernie Steiner, said the federal government failed to look at the detail of the case.

"My father has suffered a huge injustice and I believe there may be grounds for compensation, but I'm not a lawyer," he said.

Mr Zentai had been on $75,000 bail after initially spending two months in a Perth prison from November last year when Mr O'Connor made his ruling.

The great-grandfather had appealed to the court to overturn Mr O'Connor's decision on the grounds he had not been charged with any offence by the Hungarian authorities and was merely wanted for questioning. But the commonwealth argued Mr O'Connor had been fulfilling Australia's obligations under its extradition treaty with Hungary.

The Simon Wiesenthal Centre's Efraim Zuroff was stunned and described the decision as "strange".

"This means Australia has totally failed on the Nazi war crimes issue."

He said it was up to Hungary to continue pursuing the issue.

Mr Zentai has always denied killing Balazs.

Extradition proceedings began in 2005 when Hungary issued a warrant for his arrest. Mr O'Connor has 28 days to appeal.

theaustralian.com.au