Designer accused of $4m blackmail in love triangle spat

It has all the elements of an entertaining TV show: feuding owners of a successful fashion label, an alleged blackmail threat for millions of dollars and a love triangle.

But instead of playing on the small screen, the explosive drama between the glamorous Vlahos cousins will be unveiled in the NSW District Court.

Vicki Vlahos and her assistant Milad Ghazi are standing trial after pleading not guilty to blackmailing younger cousin Danielle Vlahos for $3.8 million over a love triangle affair.

The cousins co-founded the fashion label Portia & Scarlett, which has achieved incredible success in Australia and overseas and was being eyed by a buyer for millions of dollars.

About the same time they were negotiating the sale of part of their business, Danielle took a trip to Greece with Vicki's ex-husband, the court was told on Wednesday.

Evidence will suggest the pair were having an intimate relationship which caused problems between the cousins, the crown prosecutor said in his opening statement.

Danielle is expected to testify Mr Ghazi told her in September 2023 that Vicki was threatening to tell Danielle's estranged husband about the affair but she would keep quiet for $3.8 million.

The sum was the difference between the first offer for a share of the business which was not accepted and a later offer, the court was told.

"You need to pay me $4.3 million minus $900,000 to be able to live in Sydney freely and without wrecking your entire life and reputation," the older cousin allegedly told Danielle.

Danielle is expected to testify Vicki claimed to have evidence of the affair which would be deleted once an agreement was signed.

"You know this is extortion right?" she is expected to say she asked.

"Call it what you like," Vicki allegedly replied.

But Vicki's barrister Tom Hughes argued the evidence would show Danielle is a liar who hatched an "insidious plan" to gain an advantage over her cousin.

Danielle refused a high sales offer and subsequent offers kept getting lower, leading to a "very hard fought commercial dispute" between the cousins, he said.

"This is not a blackmail at all, but a decision made by Danielle to set up Vicki, to involve police, all with a view to maximising her commercial advantage," Mr Hughes told the court.

Witnesses are expected to tell the court that the relationship between Danielle and her cousin's ex-husband was no secret but instead a "very public, indiscreet affair", he said.

Vicki cut a glamorous figure as she arrived at the courthouse in a luxury Maserati car clutching a Chanel handbag and a tote from Lebanese designer Zuhair Murad.

She will be face to face with her cousin when Danielle takes the witness box on Thursday.