Coroner Michael Barnes handed down his findings following a 23-week inquest that stretched over 18 months.
While concluding that Man Haron Monis’ actions were solely responsible for his death and those of hostages Tori Johnson and Katrina Dawson, Coroner Barnes reserved special criticism for those advising the police commanders, for the Director of Public Prosecutions and for a 10-minute delay in police entering the cafe.
The coroner found the DPP had failed to apply to keep Monis behind bars while he was awaiting trial for some 46 offences, including multiple sexual assaults and a charge of being an accessory to the murder of his ex-wife.
"The police officer in charge of the murder investigation, and her immediate superiors, was concerned that Monis was granted bail on those charges and wanted the DPP to consider bringing an application in the Supreme Court for a review of the bail position," Coroner Barnes said.
"However, the New South Wales police force made no application to the DPP for that to occur.
"Police made a mistake by not arresting him on multiple sexual abuse charges, and instead serving court notices on him. That increased his chance of being granted bail when he appeared in court."
Monis 'fully understood' his actions
He declined to place any blame at police snipers positioned around the café for failing to shoot Monis when they had the chance, but condemned a 10-minute delay on police the storming the café.
Coroner Barnes concluded an emergency action "should have been initiated following the first shot of Monis at 2:03am".
"That made it clear there was little to no chance of resolving the siege, and those within the cafe were at an extreme risk of harm," he said.
"The 10 minutes that lapsed without decisive action by police was too long. Tori Johnson was executed in the meantime before the decision to enter the cafe was made.”
One of biggest public criticisms of the police response to the siege was their decision to wait to storm the café until a hostage had been killed or injured.
Coroner Barnes found no fault with their tactics, saying the risk that Monis would detonate the bomb they believed he had before they could stop him was significant at the time.
“I conclude that the commanders had insufficient guidance to help them assess whether the secondary, intangible trigger, the imminent risk of Monis' killing or injuring a hostage, had escalated to a point where it outweighed the risk associated with a forced entry," he said.
"The evidence of the police forward commanders at the relevant time suggests they were so concerned with the possibility that Monis might activate an IED during an emergency action that they had difficulty applying the secondary trigger and that effectively negated its effect.
"I recommend that the Australia New Zealand Police Advisory Agency and the Australia New Zealand Counterterrorism Committee review the guidelines of the deployment of police to high-risk situations, and the police tactical group operations manual, to ensure that those documents give commanders a guidance on how to assess imminent or immediate risk."
'Contain negotiation' has saved countless lives: NSW Police
Coroner Barnes said the police's primary strategy of "contain and negotiate" had failed.
"Contain and negotiate was the appropriate initial response to the siege," he said.
"It continued to be so even after the siege was assessed to be a terrorist event and that existing protocols.
"How long it remained at the appropriate primary response depended upon a rigourous evaluation of its effectiveness.
"There is no evidence of adequate examination was made. Reassessment of the contain and negotiate strategy would not necessarily have led to the termination of negotiations.
"However, it should have led to changes in the approach to the negotiations while alternative measures for resolving the siege were also considered."
Coroner Barnes also criticised the way in which the negotiations were carried out.
"Some clarification of what demands cannot be acceded to must be required," he said.
"It is not suggested that the negotiators failed to adequately pursue opportunities to engage with Monis because of any lack of diligence and commitment.
"Rather, it appears that their practice lacks the sophistication necessary to generate options, probably because that had never been necessary in previous work dealing with domestic siege is."
He also criticised the “unnecessary amount of resources” deployed during the storming of the café, but said this was not the fault the responding tactical officers.
“It is true that the more bullets fired, the higher the risk this would have happened," he said.
"However, I accept that the officers had to ensure that Monis was completely incapacitated to make sure he could not shoot him or the hostages, or activate the bomb they feared he had in his backpack.
"They did not fire indiscriminately or excessively."
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Coroner Barnes said Mrs Dawson's death was a "terrible accident".
"Evidence does not support the conclusion that different ammunition would have increased or decreased the likelihood of injuries to hostages," he said.
The coroner called for stronger co-operation between police and intelligence services for future such terrorist incidents and for the loosening of some privacy laws to allow for the easy flow of essential information that could have changed the police's response to Monis.
“No one government agency took a holistic look at the risky posed to the committee. None had a particular vantage point over his life,” he said.
"It is only now with the benefit of hindsight this inquest can piece together a more whole mosaic of Monis as a person. Understanding him and others like him is crucial to thwarting a threat posed by fixated lone actors.
"Current means of assessing the risk of these fixated individuals who are not necessarily committing crimes tend to be fragmented rather than holistic, piecemeal rather than coordinated, and not presently focused on fixated persons."
The coroner also found the involvement of a psychiatrist advising the police commanders was “suboptimal”.
“He was giving advice about tactics. He made erroneous and unrealistic assessments of what was occurring in the stronghold,” Coroner Barnes said.
"He gave ambiguous advice. And he was permitted to go beyond his area of expertise to give advice about Islamic terrorism.
"In addition to more clearly defining the role of any psychological adviser called in to assist, having more of them available would lessen the likelihood that individual practitioners might assume authority by expanding their role."
The coroner recommended a panel of psychological advice be used in the future instead of just one person.
Coroner Barnes said his full report, which can be read online, would not and should not be used to condemn individuals or organisations with the benefit of hindsight.
"Of course it is tragic that two innocent lives were lost, but when critiquing the police response, it is important to remember that right from the outset 18 lives were imperilled," he said.
"The outcome could have been worse for many other families, other than Katrina and Tori's. Concerned that the inquest might unfairly judge individuals by relying on the benefit of hindsight is understandable but unnecessary.
"The inquest compiled a more fixed picture than was available to any individual at the time."
He also reassured those listening that his report would not use the benefit of hindsight to criticise individuals involved in the response.
"During the inquest, events that occurred in minutes, at a dark and dangerous crime scene, were deconstructed by lawyers spending days in a secure and comfortable courtroom," Coroner Barnes said.
Other recommendations included the need for better communication between police and victim's families, changes to police training, including for negotiators, and greater co-ordination between intelligence, defence and law enforcement agencies.
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