Brittany Higgins declared bankrupt after Linda Reynolds wins defamation case | Defamation law (Australia)

Brittany Higgins’ bankruptcy at the hands of her former boss has brought Linda Reynolds one step closer to discovering where her former political staffer’s $2.4 million settlement payment went.

Reynolds, a former Liberal senator, launched bankruptcy proceedings in October after successfully suing Higgins for libel.

Federal court judge Michael Feutrill on Friday ordered the seizure of Higgins’ property under the Bankruptcy Code after a series of minor glitches and technical difficulties slowed the process.

The date of the bankruptcy process was pushed back to October 8.

“[The estate will] “It will be handed over to the bankruptcy trustee, who will take control of things and deal with the creditors in due course,” Reynolds’ lawyer, Rachel Ross, told reporters outside the court in Perth.

Reynolds’ high-profile smear victory over Higgins concerned a series of social media posts that he believed damaged the former defense secretary’s reputation.

In August, Reynolds was awarded $315,000 in damages plus $26,109 in interest after the Western Australian supreme court found that some of the posts were defamatory.

Higgins was also ordered to pay 80% of his former boss’s legal costs, estimated at more than $1 million.

Reynolds said in a statement that this was not a victory and was an “inevitable consequence” of Higgins’ actions.

“This is not a step I want to take or take lightly,” he said.

“I incurred the cost of an expensive high court hearing to prove that Ms Higgins was blatantly lying about my behavior and to stop the perpetuation of those lies.”

Higgins has not paid any of the court-ordered damages, Reynolds said.

“He was unable to intervene in any way and that is an unfortunate outcome,” he said.

Reynolds’ lawyer Martin Bennett has previously said bankruptcy would allow Reynolds to find out how much of Higgins’ government settlement is left while he tries to cover his legal costs for the libel case.

Arthur Carney, partner at commercial law firm Carneys Legal, said the trustee would now stand in Higgins’ shoes and take control of his estate and assets.

“Their job is to manage his assets, summon them and satisfy the creditors,” he said. This could include selling any property in his name, searching for any money held in trust or abroad, and potentially seizing his earnings.

Carney said trustees will be interested in where the $2.4 million compensation payment goes.

“The trustees will need to investigate what he did with that money,” he said.

Carney says the money cannot be recouped if it was “legitimately spent” on expenses such as flights, Higgins’ own legal bills or her 2024 wedding to David Sharaz. However, the trustee would seek out any property, shares or trusts that could be liquidated to pay its creditor.

Carney said that there was a serious loss of reputation with the declaration of bankruptcy.

“You cannot have a credit card, you cannot get a loan of any kind, you cannot go abroad without the permission of your trustee,” he said.

Bankruptcy usually lasts five years, after which the remaining debt is wiped out, but if the debt is discharged earlier, the bankrupt person can apply for early relief from bankruptcy.

Higgins apologized to Reynolds after the former senator emerged victorious in the pair’s high-profile five-week defamation trial.

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Judge Paul Tottle found Higgins’ social media posts made a number of accusations.

These included that Reynolds waged a campaign of harassment against Higgins, mishandled the rape allegation, and engaged in questionable behavior during Bruce Lehrmann’s annulled criminal trial for rape.

The 360-page ruling included factual findings about events involving Reynolds and Higgins, including the alleged rape in 2019 and the years after.

The decision stated that Higgins made 26 false or misleading statements in media interviews following the sexual assault allegation.

She claims that her former colleague Lehrmann raped her in the senator’s ministerial office.

A federal court judge overseeing Lehrmann’s defamation lawsuit against Network Ten found that, on the balance of probabilities, Higgins had been raped by her former colleague in the office.

Lehrmann lost an appeal against that finding but flagged off taking the case to the high court.

He denies the rape allegation, and the criminal trial was derailed by juror misconduct.

Higgins’ husband, David Sharaz, was also served with a bankruptcy notice by Reynolds and is expected to declare bankruptcy as well.

He was also found to have insulted the former politician and was ordered to pay $85,000 in damages, plus interest and costs.