Ava is a fashion investor and is always looking for emerging, cutting-edge fashion brands to invest in. Recently, she faced substantial financial losses due to the collapse of her investment in a luxury fashion label, Luma Couture, and decided to sell her high-end boutique located in the heart of Beverly Hills.

In May 2023, after discussing with her partner, Leo, and her sister, Mia, Ava established a new fashion company called Luxe Trends Pty Ltd (Luxe Trends) to create sustainable and eco-friendly fashion lines. Ava took the lead in the company's registration process. Leo and Mia, while not directly involved in setting up the company, had an understanding that they would each receive $20,000 in cash upon the company's official registration. After the registration process was completed, Leo and Mia became the first directors and shareholders of Luxe Trends.

Ava entered a contract with Luxe Trends to sell her boutique for $2.5 million. However, the market value of the boutique was considerably lower than the purchase price specified in the contract. According to an independent valuation report, the property value of the boutique was estimated at $500,000. Despite this valuation disparity, the two directors approved the purchase without further inquiry. After Luxe Trends was taken over by a listed investment company, Symphony Ltd, new directors assumed their roles and discovered that Ava had sold the boutique to the company at an inflated price. This discovery led Luxe Trends to initiate legal action against Ava, Leo, and Mia.

Advise Luxe Trends if the company has a legal recourse against Ava, Leo, and Mia. Discuss with reference to legislation and case law where relevant.

please using IRAC