Brittany Higgins has been declared bankrupt by her former boss, Linda Reynolds, after a Western Australian court approved the former defence minister's application on Friday. The decision brings Reynolds closer to uncovering the whereabouts of Higgins' $2.4 million compensation payout.
Reynolds launched bankruptcy proceedings in October following a successful defamation lawsuit against Higgins. Federal Court judge Michael Feutrill ordered the sequestration of Higgins' estate under the Bankruptcy Act, with the act of bankruptcy backdated to 8 October. Reynolds' lawyer, Rachel Ross, stated that the estate will be handed over to a trustee who will control Higgins' affairs and deal with creditors.
The defamation case stemmed from social media posts Reynolds believed damaged her reputation. In August, Western Australia's Supreme Court awarded Reynolds $315,000 in damages plus $26,109 interest, and ordered Higgins to pay 80% of Reynolds' legal costs, estimated at over $1 million. Reynolds said Higgins had failed to pay any damages or engage with the process.
Commercial lawyer Arthur Carney explained that the trustee will investigate Higgins' assets, including any properties, trusts, or overseas holdings, and examine where the $2.4 million compensation went. If the money was spent legitimately on expenses like legal bills or her wedding, it cannot be recouped. However, the trustee can liquidate assets to pay creditors. Bankruptcy also carries reputational damage and restrictions on credit and overseas travel.
Higgins had previously apologised to Reynolds after the defamation trial, in which Justice Paul Tottle found her social media posts contained defamatory imputations, including that Reynolds mishandled her rape allegation. The judgment noted 26 false or misleading statements by Higgins in media interviews. Higgins alleges she was raped by former colleague Bruce Lehrmann, who denies the claim and has lost an appeal against a civil finding of rape.
Higgins' husband, David Sharaz, has also been served with a bankruptcy notice by Reynolds and is expected to declare bankruptcy.
