All Blacks bugging: All Blacks 'didn't want it reported to police', court told

A photograph of an audio bug found in a hotel room in Sydney occupied by All BLacks team staff August 2016.

A private investigator told All Blacks manager Darren Shand that the listening device was a criminal offence and should be reported to the police, a court has heard.

But Shand wanted the matter handled "in-house", John Seward said, at a hearing in the Downing Local Court.

Seward was hired by the Intercontinental Hotel after All Black security consultant Adrian Gard said he discovered a listening device inside a chair on Monday August 15 last year.

Gard was later charged with making a false statement leading to a police investigation.

In giving evidence today, Seward said he met with Shand, Gard and two members of hotel management on Tuesday, the day after Gard found the device.

Seward said if a listening device was planted, it was potentially a criminal offence and should be reported to the police.

"[Shand] didn't want it reported to police. They wanted it handled in-house," Seward.

This conflicts with the evidence Shand gave yesterday, in which he said the private investigators did not tell him it was a criminal offence until Friday - three days later.

At a second meeting on Friday August 18, Seward repeated his belief a criminal offence may have occurred and should be reported to the police.

Shand replied the All Blacks needed to wait for a "manager" to arrive from Rio before they did anything, Seward said.

NZRU chief executive Steve Tew was in Rio for the Olympics.

"I stressed this should have been reported to police...it was not decided to report to the police, I know that for a fact," said Seward.

The evidence from Seward follows two other witnesses, senior staff members at the hotel, Paul Walters and Anna Edie.

Both said Shand was asked if he wanted the matter reported to police as early as Monday when the device was found.

But he declined to report the matter to police - because he did not want media attention, they said - until the Saturday, when the news was about to break in the Herald.