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A federal court has declared former journalist David Sharaz bankrupt, just days after his wife, Brittany Higgins, faced the same fate in a Perth court. The bankruptcies stem from legal action initiated by former Liberal senator Linda Reynolds following a successful defamation suit against the couple.
Bankruptcy signifies a significant financial and reputational consequence, with a court-appointed trustee taking control of the bankrupt’s assets. The trustee has the authority to sell assets and potentially garnish earnings to satisfy outstanding debts. Typically lasting three years, bankruptcy also carries implications for future credit applications.
Reynolds Pursues Damages Through Bankruptcy Proceedings
On Tuesday, Registrar Camille Goucke ordered Sharaz’s estate to be sequestrated under the bankruptcy act, with Reynolds’ costs fixed at $5,690, according to documents filed with the Western Australian registry. The court retroactively dated the bankruptcy to Oct. 31. Reynolds initiated bankruptcy proceedings against Higgins and Sharaz in October after winning her defamation case against them.
Sharaz was initially ordered in September to pay $92,000 for social media posts the Western Australian Supreme Court determined were defamatory to Reynolds. He was served with the bankruptcy notice on Oct. 10 while at a café in Melbourne as part of Reynolds’ efforts to recover the awarded damages.
Mounting Legal Costs and Financial Strain
Sharaz was also held jointly liable for another defamatory tweet to which Higgins responded, and is facing Reynolds’ legal costs on an indemnity basis. While the final amount is yet to be determined, it is projected to exceed $500,000. In April 2024, Sharaz publicly announced he could no longer afford to fight the case, a decision that preceded Higgins’ own trial. She was subsequently ordered to pay $135,000 plus interest in the court’s judgment.
Reynolds’ defamation victory centered on a series of social media posts that she argued damaged her reputation. Justice Paul Tottle, in a 360-page judgment, agreed, finding that the posts implied Reynolds engaged in a campaign of harassment against Higgins, mishandled her allegations of rape, and acted inappropriately during the abandoned criminal trial of Bruce Lehrmann.
Background: Allegations and Legal Battles
The case originates from Higgins’ allegations that she was raped by Lehrmann while working as a staffer for Reynolds in the minister’s Canberra office. A criminal trial concerning these allegations was abandoned in 2022 due to juror misconduct. Lehrmann has consistently denied the allegations.
In a separate defamation case brought by Lehrmann against Network Ten, Justice Michael Lee found, on the balance of probabilities, that Higgins was raped by her former colleague in the office.
Daniel Juratowitch has been appointed as the trustee to assess the financial affairs of both Sharaz and Higgins. The coming months will determine the extent of asset liquidation and the long-term financial impact of these legal battles on both individuals.
