A former senator’s goodwill gesture towards Brittany Higgins might have taken an unexpected turn, as a bankruptcy case concerning the allocation of Higgins’ $2.4 million compensation payout faces further delays.

Linda Reynolds, a former Liberal MP, had successfully sued Higgins over several social media posts that Reynolds, the ex-defense minister, claimed tarnished her reputation.

In August, the Supreme Court of Western Australia ruled some of these posts defamatory, granting Reynolds damages amounting to $315,000, with an additional $26,109 in interest.

The court also ordered Higgins to cover 80 percent of her former employer’s legal expenses, which are estimated to exceed $1 million.

To recover the costs from her defamation victory, Reynolds initiated bankruptcy proceedings against Higgins in October, further complicating the legal and financial landscape surrounding the case.

Federal Court judge Michael Feutrill today reserved his decision over Reynolds’ creditors petition to formally bankrupt Higgins after the ex-senator unusually served the documents to her lawyer and not her personally.

“All we were trying to do was facilitate service in a manner respecting mental health and fragility and that’s proving more difficult than just blindly rushing in oblivious to the effect,” Reynolds’ lawyer, Martin Bennett, told reporters outside the court in Perth.

“Because this is an unusual, novel point, and there’s no precedent for it, His Honour is correctly going to write reasons for his decision in the next few days.”

Bennett said Higgins had instructed her lawyer to accept the documents, was not fighting the proceedings and he was confident the court would accept the application.

“If somebody takes the trouble to instruct a solicitor to accept service on their behalf, they’re not contesting service,” Bennett said.

“What they’re doing is just distancing themselves from it, avoiding a knock on the door at night in front of neighbours and the like.”

If Reynolds’ application is accepted, her legal team could find out how much money Higgins has within months.

“Get behind the trust. Where’s the $2.4 million? How much has been spent, how much has been dealt with, what’s left?” Bennett said as he described the next steps in the proceedings.

Higgins apologised to Reynolds after the former defence minister emerged victorious from the duo’s high-profile five-week defamation trial.

Justice Paul Tottle found Higgins’ social media posts carried an array of imputations.

They included that Reynolds engaged in a campaign of harassment against Higgins, mishandled her rape allegation and engaged in questionable conduct during Bruce Lehrmann’s aborted criminal trial for rape.

The 360-page judgment made factual findings about the events involving Reynolds and Higgins, including her alleged 2019 rape and the events in the years after it.

Higgins made 26 false or misleading statements in media interviews after her alleged sexual assault, the judgment said.

She alleges former co-worker Lehrmann raped her in the senator’s ministerial suite.

A Federal Court judge overseeing a defamation case launched by Lehrmann against Network Ten found Higgins was, on the balance of probabilities, raped by her former co-worker in the office.

Lehrmann has lost an appeal against that finding but has flagged taking the case to the High Court.

He denies the rape allegation and his 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.

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

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