updated 11/17/2005 9:42:19 AM ET 2005-11-17T14:42:19

An Australian federal judge on Thursday ordered the chief executive of the company that owns file-swapping giant Kazaa to face cross-examination from recording industry lawyers about her assets pending a damages hearing in the landmark music piracy case.

In September, a federal court found Kazaa's owners and distributors, led by Sydney-based Sharman Networks Ltd., guilty of copyright infringement for failing to rein in illegal file sharing on their popular peer-to-peer network.

A hearing to set damages is expected sometime next year.

After months of legal wrangling, federal judge Michael Moore on Thursday ordered Sharman's chief executive, Nikki Hemming, to face cross-examination by record industry lawyers over her personal assets.  It will be her first court appearance since the multimillion dollar trial began last November.

A date for Hemming's cross-examination was not immediately set, but is expected sometime next year.

In March, record industry lawyers sought a court order to force Kazaa's owners to disclose their assets after Hemming reportedly sold her Sydney mansion to Sharman's accountant, John Myers, for 2.1 million Australian dollars ($1.55 million), but then continued to live in the house.

The music industry alleged in March that Myer distributed about half of the sale proceeds to Hemming's live-in partner and transferred the remaining 1.1 million Australian dollars ($804,000) into a Sharman controlled trust fund in Vanuatu.

In his judgment Thursday, Moore said there were "several unusual features" about the sale.  Moore said the timing of the sale — five days after Hemming's lawyers received documents outlining the record industry's case — and Hemming's stake in the Vanuatu trust were aspects that needed to be reviewed.

"One can infer that the strengths and weaknesses of the respective cases would have been apparent to the parties and those advising them," he wrote. "Greater clarity about this matter may arise from the cross-examination."

Moore also ordered Hemming to file an affidavit outlining her assets by Dec. 9.

In a statement issued Thursday, Sharman Networks said it was "disappointed" with the ruling.  "We will review the judgment and consider our options," the company said.

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