A few minutes later a second officer saw Mr Taylor leaving the address and he was subsequently arrested.
Having received information that Mr Taylor had exited the premises, the dog handler and his dog ran onto Tay Street towards Mr Taylor who was being held by the other officer.
"The dog then barked, jumped and lunged at Mr Taylor who failed to comply with the officers' instruction to get onto the ground," the report says.
A third officer then tackled Mr Taylor from behind in an unsuccessful attempt to get him onto the ground.
The dog gripped on to Mr Taylor's upper right arm.
"Over the next 50 seconds the dog was allowed to maintain a bite hold on Mr Taylor, during which time Mr Taylor was dragged one to two metres to the footpath where he was secured, handcuffed and searched and a small ornament was found."
He was taken to hospital where he underwent surgery for dog bite injuries.
During the investigation, the dog handler said he thought Mr Taylor had a knife.
Even though other officers had grabbed Mr Taylor, the dog handler said he deployed the dog because he thought they were at risk.
The IPCA found that the actions of several officers did not comply with the law or police policies.
"In the circumstances, the Authority is unable to reach a clear conclusion that the initial deployment of the police dog was unjustified," Sir David said.
"However, the Authority found that the dog handler should have warned other police staff of his belief that Mr Taylor was in the possession of a knife and he was negligent in not doing so.
"The Authority also found that there were sufficient staff present to subdue and restrain Mr Taylor and that the evidence does not support the dog handler's view that officers were at risk.
"The continued use of a police dog for about 50 seconds was therefore unnecessary and an excessive use of force.
"The failure to remove the dog caused Mr Taylor unnecessary harm."
The report also found the actions of the officer who tackled Mr Taylor "were premature and excessive" and the "likely catalyst" for the escalation of the incident.
Decision-making 'exacerbated the situation'
Southern Police today released a statement which said it accepted the IPCA report findings.
It said six officers, as well as the police dog, were involved in the arrest of Mr Taylor, who "had been drinking and was uncooperative".
"This was a fast-moving and challenging situation that played out over a relatively short period of time and involved numerous police staff who were trying to safely arrest Mr Taylor," said district commander, Superintendent Andrew Coster.
"While our staff are well-trained and strive to do their best in all situations, we acknowledge that in this case, after reviewing events, that some of our tactical decision-making was not as good as it should have been, and exacerbated the situation, rather than de-escalating it as quickly as it should have.
"The officers involved have had the opportunity to reflect on what occurred and learn from the situation."
A subsequent review of the police investigation into the incident found no criminal prosecution was warranted under the Crown Law guidelines for prosecution.
The IPCA has made no recommendations based on its findings in relation to this matter.
"However, police will take the lessons from this situation on board to minimise the possibility of any recurrence in future," Mr Coster said.
