Bankruptcy Bid Delayed by Technical Issue
Former Liberal senator Linda Reynolds has revealed she is "incredibly disappointed" that Brittany Higgins has failed to pay even one cent from her $2.4 million Federal Government settlement towards the massive bills resulting from her defamation case loss. The revelation came during Federal Court proceedings where Ms Reynolds is seeking to have Ms Higgins declared bankrupt.
Ms Reynolds' lawyer Martin Bennett made the statement after his client's bankruptcy application faced a week-long delay due to a technical issue regarding how court documents were served to Ms Higgins. The matter has been adjourned until next Tuesday while the court resolves whether service through Ms Higgins' lawyer was valid.
The Financial Standoff Intensifies
Ms Reynolds moved swiftly to recoup damages and court costs after winning her bitter Supreme Court defamation case against Ms Higgins and her husband David Sharaz in August. She served bankruptcy notices on both defendants, but the 21-day payment period lapsed without any payment being made.
Outside court, Mr Bennett told reporters that Ms Higgins claims to be personally broke despite receiving the substantial taxpayer-funded settlement. "She's incredibly disappointed that Ms Higgins got $2.4m worth of taxpayer money and has paid not a cent towards the judgment against her," Mr Bennett stated.
The lawyer emphasized that the defamation case had cost Ms Reynolds "an enormous amount to prove that dishonest lies have been said about her" and that no money has been recovered so far. He also noted that if Ms Higgins were declared bankrupt, a trustee would investigate the protective trust containing her government settlement.
Court Proceedings and Technical Hurdles
Federal Court registrar Camille Goucke questioned whether service of the bankruptcy notice could be validated retrospectively after it was served to Ms Higgins through her lawyer Carmel Galati rather than personally. Mr Bennett argued that service was effectively done with Ms Higgins' consent and for her benefit, noting concerns around her mental health.
"We are into technical bankruptcy jurisdiction," Ms Goucke remarked before adjourning the matter. If the court cannot approve retrospective service, Mr Bennett said his team would need to secure a prospective order and serve the bankruptcy notice again, further delaying Ms Reynolds' recovery efforts.
Meanwhile, Ms Reynolds' separate bankruptcy proceedings against Mr Sharaz are progressing more smoothly after he accepted personal service of the documents. Mr Sharaz was ordered to pay up to $220,000 in damages, with $85,000 payable by him alone and $135,000 that the couple are jointly liable for.
The defamation case stemmed from social media posts made by Ms Higgins and Mr Sharaz in 2022 and 2023 alleging Ms Reynolds mishandled Ms Higgins' rape allegation. Ms Reynolds strenuously rejected these claims and ultimately won her case after a blockbuster trial that featured former prime minister Scott Morrison among two dozen witnesses.
