Sure he can. But who gives a damn what the imam says. Its still illegal. Although a terrorist probably isn't concerning himself with that ;)

Yes. But a large number of imams are idiots, and many Muslims choose not to listen to them. Like most religious leaders, really. Especially in the Abrahamic faiths.

A "fatwah" is just an opinion - it just says that it is what he believes. A fatwah is only as good the imam that gives it. In this case, a stupid fatwah from a stupid imam. Islam does not have the concept of absolute truth - absolute truth. Even within the Koran, there are bits that are regarded as closer to absolute truth than others. And anybody may have an opinion, a fatwah. Of course, the opinions of a wise and learned man are worth more than those ofe the man in the street. And allegedly learned men can still be fools - as in this case.

If there is one principle that is right on top of the code of life in Islam it is the principle of justice. In Islam justice is paramount. Everything is based on justice. Even monotheism is founded on justice - for to attribute ANY part of God's creation to other than God is regarded as a gross injustice. So one is only doing justice when one is being STRICTLY monotheistic when one declares that God is only one and EVERYTHING is His alone. . Justice is so important that a Muslim MUST do FULL justice to another person regardless of whether that person believes in God or not. The belief that God will not call you to account if you do injustice to a non-believer is condemned in HQ HQ 3:75-76 which says that there are those "who, (even) if entrusted with (only) a single silver coin, will not repay it unless thou constantly stoodest demanding (it), because, they say, "there is no call on us (to keep faith) with these ignorant (Pagans)." but they tell a lie against God, and (well) they know it. Nay.- Those that keep their plighted faith and act aright,-verily God loves those who act aright." . When it comes to justice even strong emotions, like hatred, MUST NOT stand in the way of justice. HQ 5:8 says "O ye who believe! stand out FIRMLY for God, as witnesses to FAIR DEALING, and let not the hatred of others towards you make you swerve to wrong and depart from justice. BE JUST: that is next to piety: and fear God. For God is well-acquainted with ALL that ye do."

An iman can NOT give an assurance from Quranic and Hadith teaching that you can steal from non-believers (as stealing is not allowed in islam - except when life is in danger). Islam does allow other things that the imam may have explained poorly and caused the Australian to intentionally or unintentionally follow the wrong rule (e.g. if someone steals something from you that is YOURS, you have the right to take it back. The imam could have very easily translated this poorly/incorrectly as "you can take things (back) without permission from non-muslims who steal from you" - this may then be interpreted as 'You can steal from non-muslims').