The London Borough of Newham brought Johnson Onasanya, a council officer with a neighbouring borough, before magistrates, accusing him of unlawful street trading.
The prosecution was launched after the Volvo was spotted parked as Mr Onasanya attended an appointment at his GP's surgery.
Stratford magistrates convicted him of an offence under the 1990 London Local Authorities Act 1990, but Lord Justice Kay, sitting with Mr Justice Mitting, today cleared his name.
The judge said the case was 'a graphic illustration of what can happen when a prosecutor, in this case the London Borough of Newham, becomes overzealous.
'It is not and never has been suggested that Mr Onasanya is in any sense a professional street trader.'
Newham had also prosecuted Mr Onasanya over a blue Rover car in which he placed 'For Sale' notices and which was spotted parked in High Street, London, E13, three times in late 2004 and early last year.
Lord Justice Kay said he had rightly been acquitted of that charge because the Rover had been on loan to someone else whilst Mr Onasanya was out of the country and he had expected it to be parked in a garage in his absence.
The judge observed: 'There is nothing in the London Local Authorities Act which deems the registered keeper to be responsible for his car when it is in the possession and control of someone else.
'It seems to me that this is another example of just how overzealously Newham seek to approach this particular legislation.'
He added: 'I do not lose sight of the fact this is important legislation administered by local authorities for the public good, nor that it must be difficult for a local authority to deal with some of the manoeuvrings of the more unscrupulous street traders.'
However, in relation to the Rover, Mr Onasanya had put forward a 'credible explanation against which there was no contradictory evidence' and the judge said to prosecute him had been 'an excessive response' by Newham.
The judge concluded: 'It follows that, having regard to the findings of fact, Mr Onasanya was wrongly convicted in respect of the Volvo but rightly acquitted in respect of the Rover.'
STRAND NEWS SERVICE