Thyge Trafford-Jones.
It’s taken some time but the Personal Insolvency Agreement (PIA) of Howard Hao Ting Cao has been banned from the high roller room of audacious try ons, with a Federal Court judge last week confirming a decision made by a Federal Court Registrar last year that the PIA be set aside.
“The Controlling Trustee’s recommendation was (not surprisingly) to reject the proposed Amended PIA given, among other things, that, no details had been provided by the debtor despite repeated requests as to how his mother has the personal capacity to fund his gambling and business interests and given the low return in comparison to the debt level.” Justice Melissa Perry.
Justice Melissa Perry’s decision in Xu v Trafford-Jones, in the matter of Cao [2026] FCA 401 follows a meeting of creditors which saw the PIA approved, a challenge to that outcome by creditor Jiaqing Xu which saw a Registrar set aside the PIA and order Cao’s estate be sequestered and an application for review of that decision brought by Cao which was heard by Justice Perry last month.
As a result of the latest ruling Cao, who claimed in court that $30 million run through his member accounts with the Star casinos in Sydney and Melbourne was lent to him by his mother, has been declared bankrupt and dVT McLeod’s Alan Ma and Anthony Bagala have been given the job of finding some funds that can be returned to creditors.
Given the negligible sum Cao was hoping to force participating creditors to swallow, Ma and Bagala don’t have to find much.
After Cao appointed Thyge Trafford-Jones as his controlling trustee in May last year, Jones prepared a report to creditors which contained a raft of detail, of which several aspects should be singled out for mention.
One was that Cao’s liabilities exceeded $110 million, another was that Cao was offering creditors eligible to participate in the PIA a paltry $300,000 or 0.0049 cents in the dollar and the third aspect was that Trafford-Jones wasn’t having a bar of it.
“The Controlling Trustee’s recommendation was (not surprisingly) to reject the proposed Amended PIA given, among other things, that, no details had been provided by the debtor despite repeated requests as to how his mother has the personal capacity to fund his gambling and business interests and given the low return in comparison to the debt level,” Justice Perry said.
Despite Jones’ recommendation, Cao’s proposal was accepted at a meeting held on August 29, assistance being provided by a majority of excluded related creditors happy to endorse a pauperising compromise that disadvantages them not at all.
But like Jones Xu, who’d been pursuing Cao in separate but related proceedings in the NSW Supreme Court, wasn’t having a bar of the PIA either and it was Xu who set in train the bankruptcy proceedings which Justice Perry ultimately confirmed last Friday.
As her honour said: “The creditor submits, and I accept, that, in circumstances where there has been a question raised involving the same parties in respect of these transfers in different proceedings, the findings in other matters in the Supreme Court to which I have referred enable me to form a reasonable suspicion that the debtor has engaged in conduct to circumvent the freezing orders, alienate his assets and retain de facto control of various companies to which his mother was appointed as director.”
Coverage of this matter however would not be complete without mentioning the curious absence from this matter of AFSA, which restrained its policy of robust intervention in the matter of dodgy PIAs to those where blame can laid at the feet of Controlling Trustees, who it should also be noted are a much easier target than dodgy creditors happy to abuse the rules to facilitate a shady debtor’s plot.
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