The Department admitted a mistake and released him after five-and-a-half years, but because he and his son have no permanent resident status they still face possible deportation.
Mr Tran had been in Australia for seven years, and after applying for a spouse visa for his wife he was detained.
This was despite the fact that a letter notifying him of his cancelled visa had never been properly delivered to him.
David Manne, director of the Refugee and Immigration Legal Centre, told ABC's Lateline that is illegal.
"He should never have been in there in the first place. He should never have been locked up," he said.
"Under Australian law, if you're not properly notified of a decision, it is unlawful for you to be detained."
Labor's immigration spokesman Tony Burke was not allowed to have an official briefing after Tony Tran claimed he was wrongfully detained.
Mr Burke says Immigration Minister Kevin Andrews is the only minister to block access while the Government is in caretaker mode.
He says it demonstrates a cover-up and Coalition arrogance.
"In terms of incompetence the Government and this Minister have form whether it's the refugee swap, the handling of Dr Haneef's case, there's been a succession of examples of incompetence," he said.
"In terms of arrogance it's once again public servants being viewed as though they're the property of the Liberal Party."
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