Three Melbourne councils will have to refund almost $20 million in parking fines after it was found they unlawfully outsourced their review process to a private company.
Glen Eira, Port Phillip and Stonnington councils will refund more than 200,000 fines after Victorian Ombudsman Deborah Glass found they acted illegally when subcontracting challenged parking fine reviews to Tenix.
The fines were issued between 2006 and 2016 and take in popular areas including St Kilda and the Chapel Street shopping precinct.
"The legal issues have not been tested in court, so I cannot definitely determine the lawfulness of the councils' actions," Ms Glass said on Tuesday.
"But I can express my opinion, which is that the three councils acted contrary to law."
Ms Glass said the law "strongly suggests" internal reviews must be decided by the issuing agency.
The three councils disagree with the Ombudsman's findings but will refund the fines anyway.
They argue officials still had the final say over each fine review, but Ms Glass found they "rubber-stamped" the contractor's recommendations.
In one example, a council officer approved 107 recommendations from a private contractor from 107 fines in just one minute.
"The suggestion that council officers were making genuine decisions on the evidence was simply not credible," Ms Glass said.
"It is also apparent that none of the three councils disclosed who was making internal review decisions, each of them providing a similar squiggle by an anonymous officer."
It comes after Kingston and Monash councils announced last year they would repay 46,000 fines amounting to $4.9 million because of similar issues.
In a statement, Glen Eira Council said the issue had been "vexed by multiple and conflicting legal opinions and unclear communications" from the state government.
"While we have always held the view that we were conducting reviews lawfully, we have welcomed the Ombudsman's consideration, and will be guided by her recommendations," a spokeswoman said.
Both Port Phillip and Stonnington councils believed they had acted lawfully and urged the government to remove "ambiguity" from the Infringements Act.
Shadow Attorney-General Edward O'Donohue noted state government agencies also used contractors for similar internal reviews and demanded the government identify them publicly.
Premier Daniel Andrews said councils should take action on the Ombudsman's recommendations.
PARKING FINE REFUNDS:
*Glen Eira has more than 36,000 affected fines valued at $3.67 million.
*Port Phillip has more than 87,000 affected fines valued at $8.8 million. Port Phillip noted that, when other administration costs were included, the total cost to the council would be $10.83 million.
*Stonnington has almost 81,000 affected fines valued about $6.9 million.
*Applies only to motorists who unsuccessfully appealed an infringement from July 2006 to August 2017.
Australian Associated Press