In a tragic set of circumstances, Westpac Lifesaver 23 was grounded by the Civil Aviation Safety Authority due to safety paperwork issues the same day its crew received a call to help rescue Department of Immigration IT consultant Raj Kishore. Mr Kishore had rushed into the surf to try to rescue his daughter, who had been caught in a rip at Surf Beach near Batemans Bay. He was pulled from the water by surf-lifesavers but could not be revived.

On Thursday the safety authority and helicopter rescue crew pushed the blame to each other for the helicopter being unable to aid the rescue.

CASA defended its decision to ground the helicopter and insisted the rescue team could have flown to the rescue scene under "mercy flight" provisions. But the helicopter operator, Helistar, insisted it had asked for an exemption to fly rescue missions and had been refused.

CASA said it "became aware of a regulatory non-compliance in relation to the management of the airworthiness of ... [the] helicopter."

A CASA spokesperson confirmed the grounding was "very unusual" and such action was "rarely [done] anywhere in Australia". The grounding prevented Helistar conducting commercial operations. A rescue flight is considered a commercial operation if an operator has paid for it. But CASA advised there was a "mercy flight provision" where an aircraft could fly if needed for urgent rescue or lifesaving duties.

Helistar said it had asked to operate rescue missions for free during its grounding.

"Helistar requested to operate for no charge so it would not be deemed a commercial operation however again this was disallowed by the local CASA office," CEO Barrie Hosking said.

CASA denies this request was ever made.

"Helistar did not seek an exemption against the relevant regulatory requirements.

"They advised CASA during a discussion after the surf life saving incident that they decided against utilising the mercy flight provisions to respond to the emergency tasking request from the Police", a CASA spokesman said.

"There was no formal request made in relation to private operations."

READ MORE: Man dies attempting to save his daughter from rip at Surf Beach

The safety regulations state "when an urgent medical, flood or fire relief or evacuation flight is proposed in order to retrieve a person from grave and imminent danger - and failure to do so is likely to result in loss of life or serious or permanent disability - and the flight will involve irregular operations, a mercy flight must be declared."

However, Westpac Lifesaver 23 was not sent to the Surf Beach scene on Monday, and it was instead attended by Batemans Bay Marine Rescue and Batemans Bay surf lifesavers.

Helistar Aviation is the operator of the aircraft and employs Surf Life Saving Australia pilots and crew.

Mr Hosking said the company asked for an exemption as soon as they received news of the helicopter's grounding, but were refused by the local CASA office.

This request was made before the emergency call relating to the Surf Beach incident was received.

"The mercy flight provisions are not clear cut and there are a number of factors the pilot in command must take into account, one of which is what other actions can be or are being taken for the rescue," he said.

Mr Hosking said the organisation was not aware of the issue before the grounding and it was resolved within 24 hours.

"Helistar has not had this happen before in its 16 years of operation and will continue to work closely with CASA to ensure our aircraft are ready and able to assist in emergencies," Mr Hosking said.

"Helistar sincerely regrets that it was disallowed to aid in this instance due to a clerical issue and our sympathies are with the family."

Conservative estimates show it would take no more than 10 minutes for the helicopter to reach Surf Beach from Moruya.

A spokesperson from Surf Life Saving Australia said as a notification to other agencies was being prepared about Lifesaver 23 being temporarily offline from service, the call for the helicopter to attend Surf Beach was received.

"[The helicopter] was unable to respond due to an administrative issue, which resulted in CASA advising the aircraft was to be immediately grounded despite no mechanical issues with the aircraft affecting air worthiness.

"SLSA notes that all aircraft at times may go offline for either scheduled or unscheduled maintenance ...[however] there are multiple agencies with air response capabilities (i.e. Ambulance, Police) so that there is redundancy available in these circumstances.

"Our thoughts and sympathies are with all impacted with the tragic event that occurred not only in this incident but others that also occurred in recent days."