His body was found in a Palm Island police cell on November 19, 2004. A post-mortem examination revealed Mulrunji suffered four broken ribs, a ruptured spleen and a liver almost split in half.
Mulrunji was arrested for being drunk and disorderly by the policeman who is the focus of the coronial investigation, Senior Sergeant Chris Hurley.
Ms Clements rejected Sgt Hurley's evidence that he did not strike Mulrunji, in her report finding that the local police officer’s actions "caused the fatal injuries".
She said Mulrunji should not have been arrested in the first place.
Ms Clements also criticised the investigation into Mulrunji's death, saying there was suggestion of collusion between police.
She said the initial investigation into his death failed to meet appropriate guidelines, with the report not mentioning assault allegations against police.
The release of the initial coroner's report, a few days after Mulrunji's death, sparked a riot on the island near Townsville, resulting in the police station being burnt to the ground.
Recommendations
Deputy state coroner Christine Clements has made 40 recommendations including better training guidelines and changes to the police operational procedures manual.
"It's a terrible tragedy that such a minor incident can lead to a man's death in custody," she told a packed court room in Townsville, in northern Queensland.
One of the major recommendations is the establishment of a diversionary centre on Palm Island, rather than sending drunk locals to prison cells.
Ms Clements did not publicly recommend any action against individual police officers involved in the arrest of Mulrunji.
However the coroner can still make recommendations to the Director of Public Prosecutions, who has yet to make a statement to the media.
Queensland’s Premier Peter Beattie says the inquest report has been referred to the chief prosecutor.
Mulrunji's cousin Alec Doomadgee said he welcomed the move to refer the report to the DPP.
"If there's anyone with any commonsense they will look at this report and know something very suspect has gone down and someone should be charged," Mr Doomadgee said.
The Queensland government has set up a high-level task force to review the report's other recommendations and cabinet will consider the result of the review before the end of the year.