The three men were in their 5.5m aluminium StabiCraft boat when it was overturned by large swells at the Taieri Mouth sandbar at 12.45pm yesterday.
''Looking at those large 4m swells, I couldn't believe people went out there in those conditions,'' Senior Constable Steve Griffiths, of Milton, said.
''That was sheer lunacy. We could have easily had a fatality out there today, and if people keep ignoring the publicity on how treacherous the bar is, then I have no doubt we will be dealing with a fatality in the future.
''We came close to a fatality today.''
Residents rang 111 after the boat overturned, with initial reports that one of the men was clinging to the boat, one was on top of it and one was drifting away, he said.
The Otago Regional Rescue Helicopter arrived at the scene before 1pm. By that stage, the boat was submerged and the men were huddling together in the water in an effort to keep warm.
''The older guy didn't look too good, so I made the decision to take him out first,'' Dunedin Water Rescue Squad member Mark Whelan said.
John Patterson (64), of Waitoa, was the first man rescued, followed by Lance Patterson (37), of Dunedin, and then the boat's owner, Mark Madgwick (36), of North Taieri.
''Mr [John] Patterson was quite hypothermic when he was dropped off . . . and he couldn't say anything, not even his name. The other guys were in a better condition, but it was clear they had had a pretty tough time,'' Snr Const Griffiths said.
Mr Patterson was admitted to the intensive care ward at Dunedin Hospital yesterday. He was in a stable condition in intensive care. The other men were treated and discharged.
Snr Sgt Griffiths expressed his thanks to the local community who reported the incident and then turned up with blankets to support the men.
Dunedin Search and Rescue chairman Martin Balch said a few minutes longer in the cold sea and the men would not have been so lucky.
People taking a boat out on a bar, especially in rough conditions, needed to be wearing suitable clothing in addition to their life jackets, and not just jeans, Mr Balch said.
''There is always the likelihood you will end up in the water.''
On April 28, two boaties were rescued from Taieri Island after their boat flipped, and on April 30 two fishermen were towed to shore after their engine broke down.
