In 1920s Sydney, at a home overlooking Hyde Park, three sisters developed a love affair with film that would go on to change history.

Paulette, Phyllis and Isabel McDonagh became the first Australian women to run their own film production company and their third silent film has been lovingly restored to screen for modern audiences.

National Film and Sound Archive (NFSA) chief curator Gayle Lake was part of the restoration project and said the women had been surrounded by the film industry's elite from a young age.

Their father John was honorary surgeon to the premier Australian theatre company at the time, the JC Williamson theatre circuit, and their mother Annie would often throw "lavish soirees" for visiting and local actors.

Gayle Lake says the sisters were pioneers for women in the Australian film industry. ( Supplied: National Film and Sound Archive )

With their bohemian upbringing and an eye for film, the sisters quickly established themselves as "the darlings of the Australian film industry".

"They made their own films their own way," Ms Lake said.

"They certainly disregarded domestic and gender expectations to be wives and mothers and concentrated on their own career opportunities.

"They ... grew up within an environment that actually encouraged them to step outside those traditional expectations of females in society."

Their third film, The Cheaters, is about a woman who decides to end her career as a thief when she falls in love with the son of a wealthy businessman.

But her crime-boss father wants her to pull one more heist.

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Despite the success of their first two productions, The Cheaters failed to secure a wide release having been made at a time when American sound films — talkies — were flooding the Australian market.

Isabel stars in the film as lead actress under her alias Marie Lorraine, Paulette was writer and director and Phyllis producer and publicist.

The film, which was released in 1929, has been painstakingly restored and will screen at the 2018 Melbourne International Film Festival alongside a musical accompaniment by Jan Preston.

The original score will give modern audiences a taste of what it would have been like to visit a picture theatre during the glamourous silent film era.

"Jan Preston is one of the pros at feature film silent accompaniment," Ms Lake said.

"The live accompaniment has to complement what's on screen and not overpower, and it's a real talent and a real art to make that happen."

The NFSA restoration program has restored 20 films since it began three years ago.

Isabel McDonagh starred in the film under her alias Marie Lorraine alongside Josef Bambach (pictured). ( Supplied: Melbourne International Film Festival )

The amount of work required for each restoration depends on the quality of the film, which is affected both by the type of film roll and how it was stored before being acquired by the NFSA.

"In the end any sort of film is a bunch of chemicals on a base and there's wear and tear over time," Ms Lake said.

In the case of The Cheaters, which was acquired by the NFSA in the early 1980s, much of the film was well preserved but there was considerable degradation in one particular section due to decomposition of the nitrate.

"There was so much degradation on it that we actually had to look at how we would replace that footage," Ms Lake said.

"We ended up using footage from a 16mm print of the film that we had and actually cutting that in and then doing the restoration work so that it looked like its companion 35mm film that was sitting next to it.

"So there's all that work that you actually have to do, but it was a totally seamless activity and you'd never know when you look at the film."

Ms Lake said it could be tempting to go beyond restoring a film to its former glory and begin touching up blemishes that appeared in the original.

The Cheaters is about a woman who decides to end her career as a thief when she falls in love. ( Supplied: Melbourne International Film Festival )

"I think the big thing when you're looking at digital restorations is how far do you go these days because with the technology and the software that you have available to you, it's sometimes very tempting for people to think, 'Oh, well, gee, I'll just fix that up because I couldn't afford to do that when I actually made the film'," she said.

"But in following archival principles, it is always about making and creating as close as possible a replica of the original."

Ms Lake said it was important to invest in the preservation of Australian film and sound because whether they were documentaries, home movies, feature films or audio recordings, they all said something about Australian way of life.

"There is a social, creative and historical significance in the work we do in terms of actually opening up that work to not only Australians but to the rest of the world," she said.

"You don't know where you're going unless you know where you've come from and this is about our audio-visual heritage."

The Cheaters will screen at the Comedy Theatre on August 12 at 1:00pm as part of the Melbourne International Film Festival.