Regency is what everyone calls the defect inspection station in Regency Park, South Australia.
A Regency defect is a full inspection of your car for road-worthiness.
Since we don't have yearly roadworthy inspections over here, if your car is given a defect notice (yellow sticker / canary), you will be required to book it in for an inspection, once those things have been fixed.
More often than not, when the majority of people take their defected cars to be inspected, more things are added to the list and they 'fail' the inspection, where they are required to now go and fix ten more things that are also wrong with the vehicle and book it in for another inspection (all at your own cost by the way).
Most cars pass on the second inspection, sometimes it takes people three tries to get it through.
I don't knnow about the whole three times and you're out thing, because I've never been defected to the point I've had to go get a full inspection.
I've only ever had the bald tyres on the rear defect when I was younger and that was just a report to the cop shop, get it inspected, pay your $20 bucks and its cleared.