Hager is seeking a judicial review into the steps taken by police during a raid at his home last October.
The raid was carried out following a complaint from blogger Cameron Slater, who claimed his emails had been illegally hacked.
The emails taken from Slater were then disclosed to Hager, and formed the basis of his tell-all book Dirty Politics.
The object of the police search was to discover the identity of the hacker who had disclosed information to Hager.
During the raid at Hager's home, a number of documents were confiscated, including physical records, computers, CDs, phones and USB drives.
Hager's lawyer Julian Miles QC told the court today that police actions were "invasive", and described the search as a "raid on the confidential information held by a journalist."
Mr Miles told the court the warrant police used, issued by a judge, sought a wider category of documents than just those linked with the hacker and those documents relevant to Dirty Politics.
"That's a further crucial issue which should have been discussed with the judge."
He said police had been given the right to "hoover" any of Hager's documents and this put the confidentiality of Hager's sources at risk.
"It's the search itself that is so chilling, coupled with the inevitability that the search will hoover up all information the journalist has in his possession."
Mr Miles has argued that police should not have applied for the warrant, as the source material for Dirty Politics was subject to journalistic privilege under the Evidence Act.
He said as an investigative journalist Hager has to promise confidentiality to his sources.
The need for journalists to protect the identity of their confidential informants was recognised by New Zealand statue and common law, Mr Miles said.
"At the heart of the success of any journalist ... is the ability to promise confidentiality and the ability to deliver that confidentiality ... the promise is not enough if you can't follow through."
He said if police were able to raid the homes of journalists, forcing them to provide the identity of their informants, it would have a "chilling effect" on the future relationship between a journalist and their source.
The hearing before Justice Denis Clifford is set down for three days.
Police acted 'unlawfully' in raid on Nicky Hager's house - Lawyer
A police raid on the home of Dirty Politics author Nicky Hager went against his privilege as a journalist, a court has been told this morning.
Hager appeared at the High Court in Wellington today, seeking a judicial review into the steps taken by police and the District Court after his house was raided by police last year.
The raid was carried out last October following a complaint from blogger Cameron Slater, who claimed he had been illegally hacked.
The emails taken from Slater were then disclosed to Hager, and formed the basis of his tell-all book Dirty Politics.
During the raid at Hager's home, a number of documents were confiscated, including physical records, computers, CDs, phones and USB drives.
Hager's lawyer Julian Miles QC has argued police should not have applied for the warrant, as the source material for Dirty Politics was subject to journalistic privilege under the Evidence Act.
Mr Miles told the court police acted unlawfully in deciding to seek a warrant, issuing a warrant, executing the warrant and in the way the search itself was conducted.
Mr Miles said during the 10-hour-long raid on October 2, which involved six officers, Hager's house was turned "upside down".
He said Hager had not committed any offence and at the time of the raid police were treating him as a witness -- not a suspect.
He told the court that the actions of police put Hager's reputation as a journalist at risk, and as an investigative journalist he has to promise confidentiality to his sources.
"At the heart of the success of any journalist ... is the ability to promise confidentiality and the ability to deliver that confidentiality. Because the promise is not enough if you can't follow through.
"If police are able to raid journalists and force them to provide the identity of the informant that will have a chilling effect on future informants for the obvious reason."
By Nikki Papatsoumas of NZME. News Service
