Daniel Muston, 41, Ryan Peter Marshall, 31, and Anthony Raymond Mitchell, 32, were charged after allegedly performing the salute near the museum in inner city Darlinghurst on October 13, 2023.
The trio have pleaded not guilty to charges of behaving in an offensive manner in public and knowingly displaying Nazi symbols without an excuse.
Anthony Mitchell told police he was mimicking what Ricky Gervais had done in the comedy skit (Dean Lewins/AAP PHOTOS)
During an interview with NSW Police, Mitchell made multiple references to a performance by British comedian Ricky Gervais - a segment of which was introduced as evidence during a hearing at Sydney's Downing Centre on Monday.
In the clip, Gervias jokes about the name Adolf no longer being in use and performs a mock Nazi salute.
"I do that quick so no one can take a picture of me doing that," Gervais says in the clip.
"Not a traditional subject for comedy the old holocaust."
Mitchell told police he was mimicking what Gervais had done in the comedy skit after seeing it on Netflix, prosecutors told the court.
The court viewed footage of the men walking past the Jewish museum on the day of the alleged offence.
Marshall and Muston can be seen laughing and briefly raising their hands in apparent Nazi salutes.
Later the same day, a body-worn camera captured police arresting the men at a nearby construction site for offensive conduct, with one of the officers asking: "you guys were just outside the Jewish museum giving Hitler salutes?"
The court was told a security guard at the museum saw the alleged salutes on CCTV and called police.
"We were all just joking around," Mitchell said, according to the police camera footage.
"We were just making a joke."Â
Daniel Muston (left), told police people have become "too sensitive". (Steve Markham/AAP PHOTOS)
Muston tells the officers that people make jokes all the time and that people have become "too sensitive".
The arrest of the men came amid community tensions over the escalating war in Gaza, including multiple examples of alleged anti-Semitic rhetoric and behaviour.
"It's probably not the time for jokes, is it?" one of the officers tells the men, according to the footage.
"Those sort of actions do offend people."
The NSW Police prosecutor told the court it was not in dispute that what the men were doing was a joke.
"The fact it's a joke, we don't shy away from that," they said.
Magistrate Jennifer Atkinson said given the importance of the decision she would wait to deliver her verdict.
"I think it's better to stop, reflect and consider whether the prosecution has proven its case beyond reasonable doubt," she said.
The hearing continues.