A former director of a failed Victorian dairy business has told a court hearing into the company's collapse that she had no experience in the dairy industry and did not understand her obligations as a company director.

Key points: Violetta Esposito questioned over money transferred from dairy company which was used for cosmetic surgery and holiday

Violetta Esposito questioned over money transferred from dairy company which was used for cosmetic surgery and holiday Ms Esposito admits she had no experience in dairy industry

Ms Esposito admits she had no experience in dairy industry Violetta and Tony Esposito spent almost $50,000 at luxury hotel

Violetta Esposito, fiancée of National Dairy Products co-founder Antonio "Tony" Esposito, also admitted under questioning that money transferred out of the firm's accounts to repay a loan had been used to pay $25,000 to a Melbourne cosmetic surgeon and fund a $50,000 holiday at Crown Towers.

Those loan repayments were being made while dairy farmers who supplied National Dairy Products went unpaid.

Ms Esposito, who became a director of National Dairy Products after her fiancé was temporarily declared bankrupt, appeared in Melbourne's Supreme Court on Tuesday to give evidence in a liquidator's examination into the company's demise.

National Dairy Products collapsed in November last year owing millions to Victorian dairy farmers.

Ms Esposito told the court that she had previously worked at a record store and in a factory assembling car parts before meeting Mr Esposito five years ago.

At the time, Mr Esposito was the owner of another dairy business called United Dairy Power (UDP).

Tony Esposito arrives at court. ( ABC News: Sam Clark )

The court heard he sold that business to a Chinese consortium in February 2014 for $70 million, only for UDP to collapse in May 2015.

Under questioning by Carl Moller, the barrister for liquidators from Deloitte Australia, Ms Esposito said that she did not know what National Dairy Products did or why the business was established.

She claimed not to know if the business had customers, where its offices were or who its suppliers were.

Ms Esposito said she became a director of the company following a conversation with her fiancé, during which he explained that she would have no authority or involvement in the firm.

Despite this, the court heard it was Ms Esposito who called in administrators to the company after a number of its key suppliers refused to provide it with milk after the company failed to pay them.

Ms Esposito told the hearing she did not understand what voluntary administration was and could not remember who had made the decision to wind the company up.

Ms Esposito said she was unsure if she was the director of a number of other companies linked to her fiancé.

She told the court she and Mr Esposito were currently unemployed and living off the proceeds from the sale of UDP.

Violetta Esposito said she did not have experience as a company director. ( ABC News: Sam Clark )

Couple spends almost $50,000 at luxury hotel

Ms Esposito was questioned at length about a holiday she and her fiance took to Melbourne's Crown Towers hotel in March 2016.

Following a $50,000 payment from National Dairy Products, the couple spent $49,811 over three days at the luxury hotel.

The court heard that the money spent at Crown was likely to have been from National Dairy Products.

Ms Esposito could not recall how long they had stayed at the hotel and did not know whether the trip was related to pending bankruptcy proceedings against Mr Esposito.

In May, ABC's 7.30 program revealed internal company emails and bank statements which showed that Mr Esposito withdrew $325,000 from the business over just four months between July and October 2016.

At the time, Mr Esposito said the money was part repayment of the $8 million he loaned the company.

Tony and Violetta Esposito's Melbourne home in the beachside suburb of Brighton. ( ABC News: Dominique Schwartz )

Under questioning by Mr Moller on Tuesday, Mr Esposito denied running National Dairy Products, telling the hearing he had only financed the company and acted as an unpaid adviser.

Mr Esposito said the company's chief executive officer, Darryl Cardona, would consult him "from time to time" about what was happening in dairy markets.

Mr Esposito told the court that the company hit financial problems when the dairy price crashed in 2016.

He said he was surprised when a number of the dairy farmers who supplied the company announced in November last year that they were walking away from their agreement because of non-payment.

Mr Esposito said that he had told the farmers that he was about to sell a property in Williamstown and was planning to put the proceeds into NDP, but the farmers walked away prior to settlement.

The property sold for more than $2 million just days after administrators were appointed to the company.

Mr Esposito will continue giving evidence in November.