The team management was concerned about their lineout calls being intercepted, so Carter swept the areas on each side of the pitch looking for microphones.
He said his equipment was "alarming" all the way around the field.
"We deduced it was the electronics in the watering system."
From there, he went to the Intercontinental Hotel where he had discussions with All Blacks staff believing they had been bugged previously.
"We were discussing a security breach in South Africa, someone from the police said 'we've got your lineout calls', so someone else has them, you're computer has been hacked."
He started checking the strategy and team meeting rooms.
There was nothing unusual in the team room, but Carter's "non linear junction detector" picked up alerts for potential electronics in two chairs, which he set aside.
This particular piece of equipment picks up silicon in the semiconductor components, found in any electronic device.
But when he scanned the chairs with his other equipment, which checks for transmission signals, he found nothing.
Carter also found nothing in Steve Hansen's personal hotel room.
The bug specialist said he showed Adrian Gard the two particular chairs, but warned there may be nothing to worry about, as furniture can often give false readings from fibre or metal.
The only way to be certain, was to cut the chairs open, but Carter said he did not have a contract with the hotel - which owned the chairs - so it would be up to Gard to get permission.
Gard then took the chairs up to his room. The court had earlier heard from Darren Shand, the All Blacks team manager, who went to Gard's room after the security consultant called him with urgency in his voice later that same day.
"The chair that was closest to me I could see the foam of the chair, what looked like a battery and wires still in the chair, wire running along top of the foam.
"I don't recall exact words, my recollection is, 'what is that?' Basically both of us staring in shock...the realization it was some sort of listening device."
Carter said Gard called him in the evening to tell him a bug had been discovered, but Gard rejected his offer for further help.
Once the Intercontinental Hotel started investigating with a pair of private investigators, Carter returned to test more chairs.
He found seven with alerts for potential electronics, although again cautioned about false positives.
Carter will continue to give evidence this afternoon at a two-day hearing at the Downing Centre Local Court in Sydney in front of Magistrate Jennifer Atkinson.