Vic stubby holder cop to stay: court

Victoria's police chief commissioner has lost a fresh bid to dismiss an officer who was embroiled in a racist stubby holder scandal.

Former sergeant Calum McCann was last year demoted to senior constable over the stubby holders, which were distributed by the Sunshine police station social club in 2012.

The stubby holders depicted a cartoon "mudcat" fish caught on a hook with the text: "Whoever said sunshine brings happiness has never worked here and my date of birth is 01/01/?".

The terms "mudcat" and "muddie" were used by some officers at the station to refer to people of African descent.

Several officers faced disciplinary action over the scandal after the stubby holders were found to be racist and derogatory.

Sen Constable McCann was initially dismissed altogether but, after a review, the Police Registration and Services Board reversed the decision and found he should be demoted and undergo human rights training.

The board said the penalty imposed on Sen Con McCann was "harsh" and more severe than disciplinary action handed to others involved.

The chief commissioner this year took the case to the Supreme Court, seeking an order that the matter be returned to the board.

Lawyers for the chief commissioner argued the board had failed to regard public interest, maintaining community confidence and integrity in the force.

But Justice Terry Forrest on Thursday ruled in favour of Mr McCann.

"Ultimately, I am not satisfied that the board failed to take the public interest into account in their review of the sanction imposed on Mr McCann," he said in his judgment.