Assuming the police have not been totally incompetent, and are acting under the law when they searched Nicky Hager's home for material identifying Rawshark, it sets a worrying precedent, as Hager himself has stated.
I think the justification used is basically the same concept outlined by Justice Asher with regards Cameron Slater in the Blomfield trial. Asher ruled that while he (Slater) might be a journalist, and thus protected by section 68 of the Evidence Act; but as the material was obtained criminally, the public interest in apprehending the criminal negated Slater's right to not disclose sources, and the exceptions detailed under section 68.2 applied.
High Court Justice Asher’s ruling was that Slater had to cough up names because “This is not a whistleblower case. There are no political issues, or matters of public importance at stake … There is nothing to indicate that the informers have been driven by altruistic motives” (Paragraph 129.)
(No, I did not read it all - hat tip to LPRENT at The Standard for doing the hard work for me).
That was for Slater; but there is no comparison with the Hager / Rawshark situation. In Hager's case, there is a political angle and there is a public interest in knowing our political leaders are venal backstabbers.
Further, the exemptions outlined in 68.2 do not seem to apply.
Hager’s reputation and credibility would be seizing of his documents even if it leads to the identification of Rawshark. Thus, the first article of 68.2, where the public good in apprehending Rawshark outweighs "any likely adverse effect of the disclosure on the informant or any other person", does not apply. Hager would undoubtedly be harmed more than we would be helped by the violation of his right to protect his sources.
As for the second article, where the public good in apprehending Rawshark outweighs "the public interest in the communication of facts and opinion to the public by the news media and, accordingly also, in the ability of the news media to access sources of facts" does not seem to fit either. There is an overwhelming public interest in Rawshark's detailing of the sordid goings on in the beehive and on Whaleoil. That public interest would not be served by compelling Hager to hand over his documents. As Hager points out, if police are allowed to seize documents and computers over something as comparatively trivial as Cameron Slater's pique, it will make sources and journalists very uncomfortable - and not just those directly associated with the case. Public interest are not served by making people more nervous of speaking out against abuse of power.
These are very important concepts that are intrisic to journalists being able to hold those in power to account. It is very #*%$ing doubtful that the disclosure of who hacked into an attack blog is in the same league.
I’d say NEITHER 68.2 a and b apply (and they both must for the first article to be set aside). It is a massive imbalance of interests. Hager's work as a journalist is far more important to the good of New Zealand society than Slater's desire for revenge.