The High Court is being asked to review the Government's ban on some types of ammunition and its refusal to pay compensation.
The Council of Licenced Firearms Owners (Colfo) has applied to the court for a judicial review of aspects of the Government's gun law reform.
The key tenet of the application is whether the Government can outlaw ownership of property without compensation.
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"If central government powers are used to deprive lawful owners of property rights, such owners are entitled to proper compensation for the deprivation of such rights," said the Colfo application, which was made public today.
Colfo spokeswoman Nicole McKee said that Police Minister Stuart Nash applied the wrong tests when he decided what ammunition to recommend banning.
"All New Zealanders should be concerned by bans without compensation of legally purchased products. This sets a truly dangerous precedent," McKee said.
"Today it's ammunition and licenced firearms owners, but if politicians are able to ban things without financial remedy, there's no telling what's next."
McKee said many firearms owners own hundreds if not thousands of dollars' worth of ammunition that the Government has now banned.
Colfo's application said that Nash's recommendation on what to ban was irrational, asked the wrong questions, and failed to consider relevant matters including how relatively harmless some of the ammunition was.
The application said that the Minister should have had higher regard to the purposes of the Arms Act, one of which was to prohibit items that pose an extraordinary risk to the safety of the public.
Among the ammunition that Colfo considers less harmful are tracer ammunition, whose trajectory can be observed, and enhanced penetration ammunition, which have a steel or tungsten carbide penetrator.
The Minister was wrong to think that such ammunition had no civilian use, the application said.
A spokeswoman for Nash said the Minister did not comment on matters before the court.
John Herbert, who owns the online store New Zealand Repeating Arms, has said that tracer bullets and armour-piercing bullets were popular at rifle ranges.
"There would be millions of rounds of that ammunition in New Zealand. On average it costs somewhere between 50c to $1.50 a round," Herbert told the Herald in July.
"I have about 3000 to 4000 rounds. It's great for shooting into a sand bank at the rifle range, and it's half to a third of the price of commercially-made ammunition from a hunting store."
People found in possession of banned ammunition face up to two years' jail.
McKee said Colfo had raised money for the court action, but had no received any financial support from overseas organisations, including the National Rifle Association of America.