Ok, seeing as you dont want to mention the "bits"
Is the car actually illegal or is it Vic Roads telling him/her it is illegal seeing as we dont know the "bits". We are all human and the person they took it to could be wrong.
If it is indeed illegal:
Has he sought further opinion from a higher level in Vic Roads or even another branch, incase this person is in some way confused or misinformed?
Is there anyway of tracking who originally signed off the compliance at Vic Roads so help can be sought in that area (bad employee, misinformed etc)
My main concern would be getting the car to a road worthy state so it can be presented for signing and cross the bridge at that stage.
If the vehicle is not in a legal state, there is no choice but to get it complied a second time.