The man then "became assaultive and resisted arrest" which led to a violent struggle between him and the dog handler and the police dog that lasted nearly five minutes before police help arrived.
The man suffered dog bite injuries that required surgery and police later advised the authority of the incident.
The man and the dog handler gave conflicting accounts about how the struggle started and what happened. A female passenger in the stolen car was not involved in the incident and the authority was not able to find her for an interview.
Based on the evidence available, however, the authority found the officer's account more reliable.
The man was charged in relation to the stolen car as well as resisting arrest and assaulting the dog handler and his dog.
The authority found that the use of the dog was lawful and reasonable in the circumstances.
Authority chairman, Judge Colin Doherty, said because of the likelihood of injury caused by a biting dog, it considered the use of a police dog to be a significant use of force only justifiable in specific circumstances.
"On its own, apprehending the driver of a stolen car will not often warrant such significant force," he said.
"In this case, however, the dog handler was on his own, without immediate back-up facing an offender intent on both resisting and assaulting him; a situation where the use of the dog was justified".
New Zealand Police said today it accepted the authority's findings.
Rotorua Area Commander Inspector Phil Taikato said in a statement the use of a police dog to affect the arrest of the man was appropriate and justified in the circumstances.
"The incident took place in a remote location, where back-up for the dog handler was some distance away."
