Michael Speck told a Federal Court hearing on Tuesday that Music Industry Piracy Investigations (MIPI) had been "tailing" Nikki Hemming's premises on a "continuous basis" for several months until 11am on 24 May.
The unit conducted the surveillance as part of its efforts to determine who controlled the peer-to-peer software Kazaa. The issue is key to the music industry's litigation against Sharman Networks, associated companies and individuals over alleged copyright-infringing behaviour.
Speck told ZDNet Australia  "personal surveillance" of Hemming had been conducted but finished some time ago.
"She personally wasn't a subject, rather the premises associated with her were. [We were] conducting an investigation into a shadowy organisation hiding behind a veil of secrecy and surveillance is a normal practice," he said.
Speck told Sharman's solicitors that he ordered the surveillance of Hemming's premises to stop after finding out where the general manager had moved to.
"Given the nature of Kazaa, we conducted a range of investigations aimed at getting to the bottom of who controlled Kazaa. We stopped the surveillance when we confirmed her new address. We're not conducting any surveillance at present," he said.
Hemming sold her house in Castle Cove to Sharman accountant John Myers for AU$2.1 million in late February 2005.
Speck said in court that "it serves no purpose" for the unit to keep digging to find out the identity of the true owners of the peer-to-peer organisation as it had garnered enough evidence to assert in court who the true owners and controllers were.
"We are not interested because we have come to a conclusion that we are very confident about. We have consistently asserted that Hemming controls the Sharman companies, we have asserted that to the court," Speck said.
The industry has asserted that while Hemming controls Sharman Networks and Sharman License Holdings, Altnet chief executive officer Kevin Bermeister is the true controller of the Kazaa software. Altnet, which sells music and other digital products through peer-to-peer networks, signed a joint venture with the Sharman companies in 2002.
The record industry plans to continue pressing for an order to put Hemming on the witness stand for cross-examination. The case resumes on 8 June.