Ms Parti Liyani was accused of stealing a Prada bag worth $1,000 and a pair of Gucci sunglasses worth $500 from Mr Karl Liew's wife, Madam Heather Lim.
Madam Lim testified that she had not disposed of either item, though neither was in good condition.
She said she used the bag, which had frayed, when going to the gym and that the sunglasses were stained red as a result of being rubbed against her bag.
However, Justice Chan Seng Onn said the condition of the items supported the defence's contention that they had been discarded.
Ms Parti said she found the bag in the trash at around the time Mr Karl Liew's family moved out.
The judge said that Madam Lim's credibility was tainted by her testimony that there were no bags of trash on the day of the move.
The judge said it was implausible that nothing was discarded during a family's moving process, and that it was also "squarely contradicted" by Mr Liew Mun Leong, who said a lot of trash was generated.