Some of the confusion may be a result of the different scale that the Australian Bureau of Meteorology (BoM) uses to represent the severity of a given tropical cyclone. A category 3 cyclone on their scale corresponds to what we call a category 1 hurricane. Specifically, wind gusts of 170 km/hr translate to gusts of about 106mph, or sustained winds of 75mph (40% reduction). I believe that the BoM advisories -- which differ from the JTWC (and other tropical warning center) advisories -- classified Clare as a "Severe Tropical Cyclone," which is our equivalent of a hurricane, a minimal one in this case.

More information is available at http://www.bom.gov.au/catalogue/warnings/WarningsInformation_TC_Ed.shtml

Hope this helps!