Investigative journalist Nicky Hager has asked the High Court in Wellington to rule on the legality of the issuing of a search warrant and a subsequent search of his home last October.
The raid occurred as part of a police investigation into the hacking of blogger Cameron Slater's computer.
Information from his computer, obtained by a hacker known as Rawshark was published in Mr Hager's book Dirty Politics, prompting Mr Slater to file the police complaint.
In a summary of the case given to the media, Mr Hager's lawyer, Julian Miles QC said the search had grave implications for democracy in New Zealand.
In Court today he said the police raid on Mr Hager's home trampled on measures in place to protect media freedom in New Zealand.
He said the raid was extremely invasive, and took place while Mr Hager was away in Auckland and only his daughter was present.
Mr Miles said journalists' protection of confidential sources had been recognised in law, but the search warrant referred to him as simply a writer, which put a different spin on it.
He said if the Judge authorising the search warrant had been fully informed, the warrant would never have been granted.
Mr Miles also spoke about the ''chilling'' effect the Hager search would have on the future of investigative journalism.
He said the ability to offer anonymity to his sources is at the heart of Mr Hager's work and people considering giving information to investigative journalists in future would consider the outcome of this case before giving out such information.
Mr Miles said Mr Hager had not committed any offence and the police said they were treating him as a witness not a suspect, which was a very rare situation requiring careful justification for the issue of a warrant.
Mr Miles said once the police arrived at Mr Hager's home and news of the raid made it into the headlines, much of the damage was done.
He said the best way of reducing that damage was an equally high profile High Court decision that says the raid was wrong.
The case continues on tomorrow, when lawyers for the Crown are likely to begin their submissions.
The Respondents in the case are the Attorney-General, the New Zealand police who sought the warrant and the Manukau District Court which issued it.
Mr Hager also had a claim for compensation before the High Court, relating to breaches of his rights under the Bill Of Rights Act, but the question of how much that might amount to had been put aside for now.