Here's the reg for you. You obviously know of another one. I'm always keen to learn. I can't find the one you are referring to about the inspection and the 3nm.
CIVIL AVIATION REGULATIONS 1988 - REG 157
Low flying
(1) The pilot in command of an aircraft must not fly the aircraft over:
(a) any city, town or populous area at a height lower than 1,000 feet; or
(b) any other area at a height lower than 500 feet.
Penalty: 50 penalty units.
(2) An offence against subregulation (1) is an offence of strict liability.
Note: For strict liability , see section 6.1 of the Criminal Code .
(3) A height specified in subregulation (1) is the height above the highest point of the terrain, and any object on it, within a radius of:
(a) in the case of an aircraft other than a helicopter--600 metres; or
(b) in the case of a helicopter--300 metres;
from a point on the terrain vertically below the aircraft.
(3A) Paragraph (1)(a) does not apply in respect of a helicopter flying at a designated altitude within an access lane details of which have been published in the AIP or NOTAMS for use by helicopters arriving at or departing from a specified place.
(4) Subregulation (1) does not apply if:
(a) through stress of weather or any other unavoidable cause it is essential that a lower height be maintained; or
(b) the aircraft is engaged in private operations or aerial work operations, being operations that require low flying, and the owner or operator of the aircraft has received from CASA either a general permit for all flights or a specific permit for the particular flight to be made at a lower height while engaged in such operations; or
© the pilot of the aircraft is receiving flight training in low-level operations or aerial application operations, within the meaning of Part 61 of CASR; or
(d) the pilot of the aircraft is engaged in a baulked approach procedure, or the practice of such procedure under the supervision of a flight instructor or a check pilot; or
(e) the aircraft is flying in the course of actually taking-off or landing at an aerodrome; or
(f) the pilot of the aircraft is engaged in:
(i) a search; or
(ii) a rescue; or
(iii) dropping supplies;
in a search and rescue operation; or
(g) the aircraft is a helicopter:
(i) operated by, or for the purposes of, the Australian Federal Police or the police force of a State or Territory; and
(ii) engaged in law enforcement operations; or
(h) the pilot of the aircraft is engaged in an operation which requires the dropping of packages or other articles or substances in accordance with directions issued by CASA.