Two friends who founded an accessories empire are locked in a court battle over accusations company funds were used to fund lavish birthday celebrations and the purchasing of luxury items including jewellery.
Alyce Tran and Tania Liu created The Daily Edited in 2014 after meeting three years earlier while working at a Perth law firm, building it into a $25million fashion powerhouse with stores in Sydney and New York in addition to their online offering.
But Ms Liu launched legal action against her business partner in the NSW Supreme Court in December 2019, claiming Ms Tran spent thousands of dollars of the business’s money on herself in breach of her duties as a company director.
Ms Liu requested the court’s permission to take action against Ms Tran on behalf of The Daily Edited as required because the pair are the only directors and have an equal stake in the company.
Alyce Tran and Tania Liu (pictured together) founded The Daily Edited in 2014. But five years later Ms Liu launched legal action in the NSW Supreme Court over claims Ms Tran used company money for her own benefit in breach of her duties as a director
Ms Liu claimed in an affidavit provided to the court that Ms Tran (pictured) took company money to spend on luxury items, birthday celebrations and to fix a leaking roof
In September last year Justice Ashley Black granted leave to bring the action after finding there were ‘serious questions to be tried’.
Ms Liu agreed to reduce the number of transactions in dispute to 809 from 3,644 after imposing a minimum value of $500 and provided an undertaking to pay the legal costs of The Daily Edited if the court action is unsuccessful.
In her affidavit lodged with the court as part of proceedings, Ms Liu claimed Ms Tran spent more than $27,000 of company money for her 34th birthday celebrations, including on travel, alcohol, catering and event planning, Business News reported.
Ms Liu also claimed Ms Tran took $30,000 of the company’s money to pay for a leaking roof at her home and she failed to repay the amount despite attempts being made to negotiate a repayment plan.
Ms Liu detailed in her affidavit how she was of the belief that even if expensive luxury products were initially purchased for marketing purposes, those items should still be in the company’s possession or have been sold to recoup money.
The ‘expensive luxury items’ included ‘designer clothes, handbags, jewellery, rugs and high-end makeup’.
‘None of these expensive luxury goods are at the company’s premises and there is no record of the company having received the proceeds of their sale,’ Ms Liu claimed in her affidavit.
‘I believe it is wrong and contrary to the director’s duty to the company to simply throw away, or give away, or keep for oneself, expensive luxury items like those the company has spent somewhere in the vicinity of $200,000 to purchase.’
Ms Tran (pictured left and right) founded The Daily Edited with Ms Liu after the pair worked together at a law firm in Perth and built the business into a $25million fashion powerhouse
Ms Liu alleged in her affidavit expenses Ms Tran had claimed were used for the marketing and event expenses of her other business.
Ms Tran allegedly tried to conceal the expenses, Ms Liu claimed in her affidavit.
In his judgement, Justice Black said an investigation by a court-appointed expert into 454 transactions in dispute found 338 were not ‘proper expenses’.
‘The expert had in turn observed that, within some categories, a significant number of the relevant expenses were not “proper expenses”, in the particular sense,’ Justice Black said in his judgement.
‘It appears that Ms Tran had acknowledged that a number of expenses were of a personal character, and offered to reimburse those amounts to TDE, although it is not clear whether that reimbursement has since occurred.
Ms Liu (pictured) said in a statement ‘the litigation between TDE and myself with Alyce has been challenging’
‘I recognise that the fact that a transaction is not documented, or not adequately documented, does not necessarily indicate that it is not for a proper corporate purpose, although it may involve a potential contravention of the obligations to maintain true and fair accounts, under Chapter 2M of the Corporations Act.’
The case returns to court in May. Ms Liu has since filed a statement of claim, while Ms Tran has filed a defence and cross claim.
Daily Mail Australia contacted Ms Tran and The Daily Edited for comment.
Ms Liu said in a statement provided to Business News that ‘the litigation between TDE and myself with Alyce has been challenging’.
