Chen v He (Civil Dispute) - [2023] ACAT 43

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

CHEN & ORS v HE (Civil Dispute) [2023] ACAT 43
XD 391/2022
Catchwords: CIVIL DISPUTE – where tenants claim damages for deceit and breach of contract against lessor’s agent – where agent charged tenants a past due amount for water usage predating the commencement of the tenancy – where agent charged tenants for water usage using fake water bills – where agent charged tenants extra bond and rent without the lessor’s knowledge and authority – where agent agreed for reward to do the end-of-lease cleaning and garden maintenance but failed to do so properly – damages awarded for deceit and breach of contract

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 s 48

Agents Act 2003 ss 8, 8A
Residential Tenancies Act 1997 s 23

Cases cited:Briginshaw v Briginshaw [1938] HCA 34
Cargill Australia Ltd v Viterra Malt Pty Ltd (No 28) [2022] VSC 13
Magill v Magill [2006] HCA 51
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66
Wood v Balfour [2011] NSWCA 382

Tribunal: Senior Member M Orlov

Date of Orders:  16 August 2023
Date of Reasons for Decision:      16 August 2023
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          XD 391/2022
BETWEEN:
JIESHAN CHEN
First Applicant
JIAHAO XU
Second Applicant
KEREN HE
Third Applicant
SIMIN ZENG
Fourth Applicant
YUCHEN XIE
Fifth Applicant
HUAHUA LIU
Sixth Applicant

AND:
HONGGUANG HE
Respondent

TRIBUNAL:Senior Member M. Orlov
DATE:16 August 2023

ORDER
The Tribunal orders that:

The respondent is to pay $10,831.40 to the applicants, comprising;
(a)damages for deceit, assessed at $6,258.77 plus interest to the date of order of $2,311.51;
(b)damages for breach of contract, assessed at $1,800.00 plus interest to the date of order of $299.15; and
(c)the ACAT filing fee of $162.00.

………………………………..
Senior Member M Orlov

Contents

ORDER
REASONS FOR DECISION

Introduction

The evidence

The applicants’ evidence
The respondent’s evidence

Standard of proof

Credit findings

Background

Commencement of the tenancy
Mr He denies he was the lessor’s agent
The first water bill Mr He gave the tenants was genuine
The lessor instructed Mr He to charge tenants the full amount due on Icon Water invoices
The lessor received payment in full for the first water bill
The lessor “incentivised” Mr He to not question water bills for her properties
Mr He claims he had no choice but to keep working for the lessor after she reduced his “wages” in August 2018
The second water bill for which Mr He charged the tenants was a fake
The rent increase from February 2019
The third water bill for which Mr He charged the tenants was a fake
The fourth water bill Mr He gave the tenants was an obvious fake
Mr He claims he was given only the front page of the water bills and there was nothing on the back
Mr He claims he “became suspicious” the fourth water bill was photoshopped but did not verify his suspicions with the lessor
Mr He claims payment of $1,645 for the fourth water bill came about because the lessor instructed him to “negotiate the best result he could”
Mr He agreed to do the end of tenancy cleaning and garden maintenance for $1,200
The lessor contacted Ms Chen about the bond
Deductions from the bond for the cost of cleaning and garden maintenance

The elements of the tort of deceit

Consideration

The claim in respect to the first water bill
The claims in respect to subsequent water bills
The claim in respect to the unauthorised bond and rent charges
The claim in respect to cleaning costs

Disposition

REASONS FOR DECISION

Introduction

These proceedings arise out of a tenancy agreement for residential premises at 9 Outback Street, Lawson. The house comprises an upstairs and downstairs part. Each part was separately rented. Six tenants lived downstairs. Three lived upstairs. Downstairs was known as ‘9 Outback Street’ . Upstairs was known as ‘9A Outback Street’. At all material times, the premises were owned by Jiang Li, also known as “Jenny”. I will refer to her as the lessor.
The applicants are former tenants of 9 Outback Street. They are Jiahao Xu (Mr Xu), who was the head tenant named on the residential tenancy agreement, Jieshan Chen (Ms Chen), Keren He, Simin Zeng, Huahua Liu and Yuchen Xie. I will refer to them collectively as the tenants. The tenancy commenced on 1 February 2018, initially for a fixed term ending on 1 February 2019, after which it continued as a periodic tenancy until it ended on 28 January 2020.
The respondent, Hongguang He (also known as Dr Michael He) (Mr He) acted as the lessor’s agent for this and other properties that Jiang Li and her husband owned, although he denies vehemently that he ever acted as an unlicensed real estate agent.
The tenants make three claims against Mr He.
First, the tenants claim Mr He charged the house – i.e., 9 and 9A Outback Street – $9,894.50 for water consumption between February 2018 and November 2019, of which the tenants paid $6,519.54. The tenants claim Mr He demanded payment based on fake Icon Water invoices and that the actual water consumption charges for the period in question was $2,619.64 of which they accept they should pay two-thirds, amounting to $1,746.43.[1] They allege Mr He directed them to pay the amounts into a bank account belonging to his mother‑in‑law (Limei Shi) and that he misappropriated the money for his own benefit. The tenants claim the overpayment of $4,772.91 as damages for deceit.
[1] As the premises were not separately metered, the lessor was not entitled to charge the tenants for water consumption. Clause 42(c) of the standard residential tenancy terms in Schedule 1 of the Residential Tenancies Act 1997, provides that the lessor is responsible for the cost of services for which there is not a separate metering device so that amounts consumed during the period of the tenancy cannot be accurately decided. However, the tenants chose not to enforce their rights against the lessor in related matter RT 95/2022, which I dismissed on the first day of the hearing, accepting they should pay two thirds of the water consumption charges, on the basis that there were six tenants living downstairs and three living upstairs. The tenants did not accept that they should pay any part of the annual supply charge for water and sewerage, which is included in the quarterly Icon Water invoices. Clause 44 of the standard residential tenancy terms provides that the lessor is responsible for this cost. As will appear, this has no bearing on the claims against Mr He.
Second, the tenants claim that in February 2019, Mr He increased the rent from $1,050 to $1,150 per week and charged an extra $400 deposit without the lessor’s knowledge or authority.[2] They allege Mr He directed them to pay the rent into his mother-in-law’s bank account and that he misappropriated the funds for his own benefit. The tenants claim the difference between the rent they paid and the amount they say they should have paid in the second year, which they calculate at $2,807.14 plus $400 for the extra deposit, as damages for deceit.
[2] The “extra $400 deposit” refers to an increase in the bond. As will appear, neither the original bond of $4,200, nor the extra $400, was deposited with the Territory in accordance with Part 3, Division 3.2 of the Residential Tenancies Act 1997
Third, the tenants claim they had an agreement with Mr He that for $1,200 he would arrange for the premises to be cleaned and for the garden to be tidied up to comply with the lessor’s end-of-lease requirements. They paid the money, but Mr He did not do a proper job, because of which they paid a further $1,200 for cleaning and $600 for garden maintenance. The tenants claim $1,800 as damages for breach of contract.
The tenants also claim interest and the ACAT filing fee.
Mr He denies he forged the Icon Water invoices he gave to the tenants. His defence is that he passed on invoices the lessor gave him and, in accordance with her instructions, charged the tenants two thirds of the full amount due on the invoices. He claims he remitted all amounts collected as payment for water bills to the lessor.
Mr He denies he increased the rent without the lessor’s knowledge or authority. His defence is he did so on her instructions and that he remitted all rent to the lessor, less amounts he was entitled to keep in payment for his services and reimbursement of legitimate expenses.
Mr He denies the premises were not cleaned satisfactorily. He claims the tenants locked him out of the premises before he finished cleaning.
There are other proceedings on foot or threatened between the parties. The lessor claims Mr He failed to account to her fully for rent paid by tenants of her and her husband’s properties, not only for 9 Outback Street, but for up to 30 properties Mr He managed for them and that Mr He acted unlawfully as an unlicensed real estate agent. Mr He denies defrauding the lessor and claims he was employed under a sham contracting arrangement. He claims the lessor exploited him and should pay him compensation for unpaid wages and other award benefits. There are also defamation proceedings between Mr He and some of the tenants.
Because of this, I have been cautious in assessing the evidence given by the tenants, the lessor and Mr He. I am conscious that English is not their first language and, although all appeared to have a reasonable understanding of what was happening in the hearing, there were times when it was necessary to call on the assistance of a translator. I have given greater weight to translations of WeChat conversations, where they are available. However, the record is far from complete, particularly as it relates to communications between the lessor and Mr He. Also notably lacking is any adequate documentary record of moneys received by Mr He on behalf of the lessor and her husband and reconciling amounts he paid them.
In conducting the hearing, I endeavoured to keep the parties focused on issues that are relevant to this case. Mr He was inclined to stray into issues involving his working relationship with the lessor and her husband, which he claimed were relevant to his principal line of defence – namely, that everything he did was done in accordance with explicit instructions given him by the lessor. Mr He appeared particularly sensitive to any suggestion that he was carrying on business as an unlicensed real estate agent and sought to minimise his role in managing her and her husband’s properties. I attribute this to the fact that he is now a licensed real estate agent and knows, if he can be believed that he did not know then, that it is an offence to provide services as a real estate agent without a licence. Much of Mr He’s evidence about the basis of his working relationship with the lessor was either irrelevant or, in the final analysis, did not help his defence.

The evidence

The hearing took place over four days. The transcript of the hearing runs to 411 pages. The documents on which the parties relied comprise more than one thousand pages. Not all of it is evidence. Not all of it is relevant. Interspersed throughout the material is commentary – in Mr He’s case, often in the form of handwritten notes scribbled on copies of documents that are part of the primary evidence. It is impossible to refer to all of the material. Nor is it necessary or appropriate to do so. I have read and considered everything the parties relied upon. I have reviewed the transcript in detail, and I have conducted my own detailed analysis of the financial records.
The applicants’ evidence
The tenants’ documents were admitted into evidence as exhibits numbered A1 to A6.
Exhibit A1 comprises 118 pages. It includes translated extracts of WeChat conversations between Mr Xu and Mr He relating to payment of rent and water bills, copies of Icon Water invoices provided by Mr He to Mr Xu, copies of Icon Water invoices provided by the lessor (which she downloaded from the Icon Water website) and commentary in the nature of submissions;[3] a timeline of events prepared by Mr Xu and treated as part of his witness statement ;[4] a witness statement by Ms Chen;[5] witness statements by each of the other tenants which were not admitted into evidence because the tenants were not available to be cross-examined;[6] a witness statement by David Wang, who took over management of 9 Outback Street from Mr He in early 2020;[7] a witness statement by a cleaner, Ming Cho, also known as Leslie and photographs he took showing the condition of the premises before he cleaned them; [8] and translated extracts of WeChat conversations between Mr Xu and Mr He relating to the final cleaning issue.[9]
[3] Exhibit A1, pages 1-53
[4] Exhibit A1, pages 54-61,64
[5] Exhibit A1, pages 62-63
[6] Exhibit A1, pages 65-70
[7] Exhibit A1, page 71
[8] Exhibit A1, pages 72, 73-89, 99-118
[9] Exhibit A1, pages 92-98
Exhibit A2, titled “Money Flow”, was prepared by Mr Xu and traces how payments made into Limei Shi’s bank account for rent and water bills were transferred to Mr He’s bank account and used for his own purposes, including to pay off his credit card.
Exhibit A3 comprises copies of Mr He’s bank statements for the period from 14 July 2017 to 30 June 2020.
Exhibit A4 comprises copies of Limei Shi’s bank statements for the period from 17 November 2017 to 18 May 2020.
Exhibit A5 comprises a bundle of documents intended to prove that the lessor returned $2,170.80 to Mr Xu on 10 March 2020, after deducting $1,800 for cleaning and garden maintenance and $229.20 for water consumption from the $4,200 bond.
Exhibit A6 comprises a bundle of documents titled “Extra Evidence”, addressing various issues that arose during the hearing.
Each of the tenants’ witnesses gave oral evidence and was cross-examined by Mr He. The lessor did not provide a witness statement, but I gave leave for her to give oral evidence and for Mr He to cross-examine her.
The respondent’s evidence
Mr He’s documents were admitted into evidence as exhibits numbered R1 to R10.
Exhibit R1 includes photographs of the premises before and after cleaning;[10] extracts of WeChat conversations, most of which appear to relate to other premises;[11] a spreadsheet prepared by Mr He purporting to show how and when payments he received from Mr Xu were transferred to the lessor with copies of bank statements on which he based the spreadsheet; [12] a receipt showing Mr Xu paid rent directly into the lessor’s bank account on 28 February 2018;[13] extracts from the lessor’s bank records produced in partial answer to a subpoena;[14] and documents and commentary relating to Icon Water invoices.[15]
[10] Exhibit R1, pages 2-19
[11] Exhibit R1, pages 22-30
[12] Exhibit R1, pages 31-36, 37-206
[13] Exhibit R1, page 207
[14] Exhibit R1, pages 208-219
[15] Exhibit R1, pages 220-245
Exhibit R2 is a 46-page document titled “Response to XD391/2022 and Witness Statements”, comprising evidence in the form of documents, some of which Mr He annotated by hand, commentary and submissions prepared by Mr He.
Exhibit R3 is a bundle of documents that includes a screen shot of an Excel spreadsheet purporting to show that in February 2019 the lessor used rent from incoming tenants to repay the bond to outgoing tenants of other properties;[16] a witness statement by Mr He’s wife, Qian Zhao;[17] a witness statement by Bill Yu relating to alleged cash payments of rent for a different tenancy, which I refused to allow because the evidence was irrelevant to the issues in this case;[18] a printout from the Icon Water website relating to backdating of charges;[19] screenshots of Excel spreadsheets showing rent received and remitted to the lessor in March 2018, August 2018, February 2019, and April/May 2019.[20]
[16] Exhibit R3, page 225
[17] Exhibit R3, page 226
[18] Exhibit R3, page 228
[19] Exhibit R3, pages 239-240
[20] Exhibit R3, pages 241-2
Exhibit R4 comprises translated extracts from WeChat conversations with the lessor and other tenants relating to other premises.
Exhibit R5 is a document titled “Response to Li Jiang’s email on Friday, 24 June 2022 4:32 PM Response to XD 404/2022 and RT 95/2022”. Mr He relied on this notwithstanding the email to which he was responding was not in evidence.
Exhibit R6 is a timeline with documents, most of which relate to work Mr He did for the lessor in managing her portfolio of properties.
Exhibit R7 is a bundle of screenshots showing receipts for rent and payment of water bills for various properties owned by the lessor and her husband.
Exhibit R8 is Mr He’s witness statement describing his role in working for the lessor and her husband, in which he claims he was a casual employee working under a sham contracting arrangement and that he was not an unlicensed real estate agent.
Exhibit R9 is an email Mr He sent (under the name Gavin Henry) to Mr Xu and the tribunal on 28 November 2022, responding to exhibit A6.
Exhibit R10 is a document Mr He prepared responding to matters that I raised on the third day of the hearing bearing on his understanding of information contained in Icon Water invoices.
Mr He gave extensive oral evidence. I questioned him to elicit evidence on all relevant issues. He was then cross-examined by Mr Xu. Mr He’s wife, Qian Zhao, also gave evidence and was cross-examined by Mr Xu.

Standard of proof

The issues in this case must be decided applying the civil standard of proof – i.e., proof on the balance of probabilities – notwithstanding the central issue is whether Mr He dealt dishonestly with the tenants. In a frequently quoted passage, Dixon J said in Briginshaw v Briginshaw [1938] HCA 34 (Briginshaw):
[W]hen the law requires proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality … it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.[21]
[21] [1938] HCA 34, pages 361-362
In Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66, the plurality (Mason CJ, Brennan, Deanne and Gaudron JJ) said:
The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remained so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary ‘where so serious a matter as fraud is to be found’. Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct.[22]
[22] [1992] HCA 66 at [2]
I have applied these principles in making findings of fact.

Credit findings

Mr Xu and Ms Chen’s evidence was anchored in contemporaneous records of WeChat conversations. In my judgment, they made an honest attempt to give an accurate and complete account of relevant events.
I do not regard the lessor as a reliable witness. At material times, she and companies she controlled with her husband had a substantial portfolio of new or near new rental properties she leased to international students, usually from China. She retained bonds paid by tenants instead of depositing them with the Territory, which is an offence under section 23 of the Residential Tenancies Act 1997 (RT Act). She required tenants to reimburse her for the full amounts Icon Water charged for water and sewerage supply and water usage where premises were not separately metered and passed on interest charges for late payment, none of which was lawful. It was in her interest to blame Mr He for her unlawful activities and to prove he was dishonest in managing her and her husband’s properties. In my judgment, this coloured her evidence.

Although the lessor was in the best position to provide the Tribunal with documentary evidence relating to the serious allegations she and the tenants made against Mr He, she claimed to no longer have access to WeChat accounts she used to communicate with Mr He, although some extracts found their way into evidence. She claimed she did not have copies of Icon Water invoices she gave Mr He and instead provided invoices downloaded from the Icon Water website on the first day of the hearing. She claimed she did not keep records of rent paid by tenants. She failed to comply with a subpoena Mr He issued requiring her to produce her bank records, although this had no bearing on the result because other bank records were produced to the Tribunal that showed the amounts Mr He transferred to her and her husband’s accounts. She claimed to have no records of amounts Mr He paid her each month, or documents evidencing how she and Mr He reconciled their monthly accounts – a highly improbable claim where, over a two‑year period, Mr He collected in the order of $800,000 rent for which he had to account to the lessor and her husband.
As a lay person, Mr He lacked the forensic skills and experience necessary to cross-examine the lessor effectively, which is not unexpected. In the final analysis, I have given the lessor’s evidence little weight except in limited circumstances where it can be corroborated independently or where it appears inherently likely, considering the context, that the evidence is true.
Mr He’s credit is critical to the outcome. My assessment, having observed and listened to him carefully giving evidence over four days, is that he is not an honest witness. He attempted to minimise his involvement in and responsibility for events and circumstances that are central to the tenants’ claims. Wherever possible, he sought to blame the lessor, attempting to convey the impression he was a “slave” to her instructions. A recurrent theme in his evidence was that he did everything the lessor instructed him to do without question. His bitterness towards the lessor, whom he claims exploited him and “treated him as a dog”, was frequently on display and, to a significant degree, coloured and shaped his evidence. He was often evasive. He gave inconsistent evidence on important issues. In parts, his evidence strained credulity. Some of it was demonstrably false. Although not the only reason, Mr He’s evidence over four days in relation to the fourth water bill, which I examine in detail later, convinced me he is not a truthful witness.
Mr He’s wife, Qian Zhao, gave evidence supporting some aspects of her husband’s evidence. Her credit is not important to the outcome.

Background

Commencement of the tenancy

On 6 January 2018, Mr Xu contacted Mr He, inquiring about a house to rent. Mr He told him that he is an agent, operating as Dr Michael He Real Estate Management, and has about 20 houses under management in Yarralumla, Franklin and Lawson. They went together to inspect 9 Outback Street, Lawson that day.[23]
[23] Exhibit A1, page 54
On 15 January 2018, Mr Xu and the other tenants, who were friends of his, decided to rent 9 Outback Street for $1,050 per week. Mr He asked Mr Xu to transfer $4,200 for the bond (described as “deposit for rent”) and $150 (described as “deposit for keys”) to Limei Shi’s bank account, which Mr Xu did.[24]
[24] Exhibit A1, pages 44, 54
On 17 January 2018, Mr He told Mr Xu the tenants would have to pay the water bill for each quarter, and that he would give them the bill when the time came.[25]
[25] Exhibit A1, page 54
On 30 January 2018, Mr Xu paid the first month’s rent for 9 Outback Street into Limei Shi’s bank account. At about the same time, he signed a residential tenancy agreement for a fixed term from 1 February 2018 to 1 February 2019 at a rent of $1050 per week, payable four weeks in advance. “Dr Michael He” is handwritten on the front page next to the printed words “The Lessor’s agent is”.[26] Only the first page of the agreement is in evidence, as Mr Xu did not retain a copy at the end of the tenancy and neither Mr He nor the lessor had a copy.
Mr He denies he was the lessor’s agent
[26] Exhibit A1, page 51
Mr He thought it was important to his defence to establish that he was not the lessor’s agent, but rather a casual employee with no decision-making responsibility or capacity because the lessor controlled everything he did. He maintained this position throughout the hearing.
He denied signing the tenancy agreement as the lessor’s agent. He also denied that the document identifies him as the lessor’s agent, although he agreed the handwriting on the document is his and that he handwrote the words “Dr Michael He” next to the printed words “The lessor’s agent is …”.[27] He agreed his job included arranging to let the property to the tenants and collecting rent and payment for water consumption,[28] although he denied doing so on the lessor’s behalf:
SENIOR MEMBER: Yes. And you did that on behalf of Ms Jiang?
THE INTERPRETER (~~APPLICANT~~ MR HE): I want to emphasise that I’m not – I was not acting on behalf of Ms Jiang. I’m just simply doing things as instructed by Ms Jiang. Like, I don’t have the right to make a decision. If she asked me to charge money from the tenants I will do it. And if she told me to mow the lawn I would do it.[29] [Corrections added]
[27] Transcript of proceedings 16 November 2022, page 6 at line 1 to page 7 at line 11
[28] Transcript of proceedings 16 November 2022, page 59 at lines 1-13
[29] Transcript of proceedings 16 November 2022, page at lines 15-21
The lessor said she engaged Mr He in about January 2018 after seeing an advertisement on a Chinese community website, CBR Life, in which Mr He was looking for properties to manage.[30] Their agreement was oral. She described his responsibilities as follows:[31]
MS JIANG: Dr He. He’s supposed to find the qualified tenants and ask them to pay rent into a trust account and he’s taking the management fee – 10 per cent out of the rent he received for the first year and he will pay the remaining to me. And as an agent’s responsibility he need to make sure the house is clean and in the condition I hand it over to him. They are brand new properties and that they also – the gardens is tenant’s responsibility as well.
…
MR SMITH: Who decided what the rent should be of your rental properties in about January 2018?
MS JIANG: I think we both gone through the properties and that he proposed how much could rent for and we take his proposal and hand over key to him.[32]
[30] Transcript of proceedings 17 November 2022, page 66 at lines 1-11
[31] As the tenants did not lodge a witness statement by the lessor (although Ms Jiang lodged witness statements in her application against Mr He which I dismissed on day 1 of the hearing) I gave leave for Ms Jiang’s solicitor, Mr Smith, to lead evidence from her in chief.
[32] Transcript of proceedings 17 November 2022, page 66 at line 25 to page 67 at line 7
The lessor knew Mr He found tenants for 9 Outback Street and the rent they were paying but did not know the identity of the tenants or how many persons were living there.[33] She did not have a copy of the tenancy agreement. Mr He did not suggest otherwise.
[33] Transcript of proceedings 17 November 2022, page 66 at lines 27-39, page 69 at lines 30-43
The lessor communicated with Mr He via WeChat about the properties he managed for her. They communicated about rent, property inspections, repair and maintenance issues, which she arranged through her husband who ran a construction business, and garden maintenance, for which tenants were responsible.[34] The lessor largely left Mr He to deal with tenant issues.[35]
[34] Transcript of proceedings 17 November 2022, page 69 at line 24 to page 70 at line 31
[35] See for example Exhibit R1, pages 22-26
Mr He claimed that, each month, all the money collected for rent:
[W]ent to Ms Jiang’s accounts minus 5% or 10% of collected rent as my wage at the first year and 4% of collected rent as wage at the second year and both minus her approved cost of house maintenance appliances such as shower lights, fridges and washing machines.[36]
[36] Exhibit R2, page 33 at [39]
Mr He described how he and the lessor reconciled amounts due to her:
Each month at early reconciliation days, Ms Jiang audits her total amount and instructed me to explain all the amounts to her satisfaction. If there are shortfalls, I am required to reconcile as she instructed. The principle is the totality must be within her calculation. My wage then will be 4% of collected rent on her calculations. This again can be demonstrated that sometimes I have a small amount less than $2000 which I transferred to Ms Jiang’s accounts, these are instructions from Ms Jiang to make the totality to be the exact amount as she calculated.[37]
[37] Exhibit R2, page 32 at [33]
He also said:
In the lump-sums to Jiang. What Ms Jiang wanted to control is the totality of the rent, water bills and bond. I transferred money and delivered cash to Ms Jiang in a form of lump sums, occasionally point to point … Ms Jiang would calculate each month from her end. If she found the amount is not to her calculation, she would ask me to explain immediately. Ms Jiang is aware of all the situations.[38]
[38] Exhibit R2, page 15 at [42]
Mr He said he prepared three kinds of records in relation to his management of the lessor’s properties.
The main method of record-keeping involved preparing an Excel spreadsheet each month. Initially, Mr He claimed that his wife, Qian Zhao, “was like a bookkeeper for Ms Jiang” and prepared the spreadsheets, while he did “the heavy duty like mowing, gardening or talking”.[39] However, on the third day, Mr He said he prepared the spreadsheets, not his wife.[40] This was one of numerous inconsistencies in Mr He’s evidence.
[39] Transcript of proceedings 17 November 2022, page 97 at lines 19-24
[40] Transcript of proceedings 25 November 2022, page 21 at 35 to page 22 at line 1
In the spreadsheets, Mr He recorded the property, rent payments – including where tenants paid rent to the lessor directly – cash receipts, payments and cash delivered to the lessor. Mr He said sometimes the lessor instructed him to refund the bond owing to an outgoing tenant from rent paid by the incoming tenant, which he would record in the spreadsheet.[41] Expenses were also recorded, such as where Mr He had to buy a refrigerator, washing machine, kitchen utensils, bedding, or furniture for the lessor’s properties, or where he paid to dispose of rubbish left by tenants.[42]
[41] Transcript of proceedings 25 November 2022, page 24 at lines 17-37
[42] Transcript of proceedings 25 November 2022, page 25 at lines 1-46
Mr He sent screenshots of the spreadsheets to the lessor examples of which appear in the evidence:[43] March 2018;[44] August 2018; [45] February 2019;[46] April/May 2019.[47] Mr He claimed these were the only copies he could find.
[43] Transcript of proceedings 28 November 2022, page 41 at line 40 to page 42 at line 7
[44] Exhibit R2, page 27 and Exhibit R3, page 241-1
[45] Exhibit R2, page 31 and Exhibit R3, page 241-2
[46] Exhibit R2, page 26 and Exhibit R3, page 225
[47] Exhibit R2, page 28 and Exhibit R3, page 242
A second form of record-keeping comprised handwritten notes, the only example of which appears at page 374 of exhibit R7. Some were provided as a substitute for the spreadsheet. Others were provided to supplement or update information in the spreadsheet.[48]
[48] Transcript of proceedings 25 November 2022, page 28 at line 43-47
A third form of record-keeping involved Mr He taking photographs of a tenant holding their phone displaying a screenshot of a receipt for an electronic funds transfer, examples of which can be seen at pages 20 to 22 of exhibit R2 and pages 352 to 370 of exhibit R7.[49] Some of these involved international funds transfers, as Mr He explained:
[49] Transcript of proceedings 25 November 2022, page 33 at lines 1-44
THE WITNESS: So each year, normally in June of every – each year is a peak season for Chinese international students to make a booking for their accommodation.
SENIOR MEMBER: Yes.
THE WITNESS: Often they will not have an in-person inspection. Rather, they will just pay directly from China by using a search code and ~~Jung~~ Jiang will provide me her search code for her Westpac bank account and the incoming international students would go to the bank, often China Bank or China Industrial & Commercial Bank, and do the international wire – wire the money, and they will send me the – the slip, you know, the transfer, and they send a copy of the – of the transfer of this to me and I forwarded it to – to ~~Jung~~ Jiang.
SENIOR MEMBER: So how would the students send you a copy of the transfer?
THE WITNESS: Using – they were using their WeChat to transfer to my WeChat, and then - - -
SENIOR MEMBER: So it was an image. They would send a photo.
THE WITNESS: Yes, like the 368 through this - - -
SENIOR MEMBER: Sorry. Just a moment.
THE WITNESS: 368, yes.
SENIOR MEMBER: Yes, I see.
THE WITNESS: Yes, and you can see the receiver name is Li ~~Jung~~ Jiang. [Corrections added][50]
[50] Transcript of proceedings 25 November 2022, page 35 at lines 5-36
Mr He claimed he transferred about $500,000 in total to the lessor’s personal and company accounts in 2018 and $312,501 in 2019, not including cash delivered to her house each month.[51]
[51] Exhibit R2, pages 32-33 at [36]
Mr He claimed the lessor instructed his mother-in-law, Limei Shi, to “set up an account to specialise in receiving rent from Ms Jiang’s 30 properties so that Ms Jiang can manage in an easier way” and that “the reason Ms Jiang asked me to do, she said ‘The rent you collect here, it’s not your money. It cannot go to your account”.[52] However, the evidence shows Mr He did not keep rent receipts in a separate account and that he mixed funds belonging to the lessor with his own.
[52] Transcript of proceedings 17 November 2022, page 98
Mr He was cross-examined about this by Mr Xu:
MR XU: Okay. So, next question is you told the Senior Member that you used your mother-in-law’s bank account for some of the transactions, right?
THE WITNESS: Yes.
MR XU: So is that your or landlord’s idea to set up a bank account to manage those moneys?
THE WITNESS: The account from my mother-in-law was already there.
MR XU: Yes.
THE WITNESS: So the idea to use the account is the landlord’s idea, yes.
MR XU: So, can I understand that, like, landlord ask you to use separate bank account manage all those fees, right?
THE WITNESS: Yes.
MR XU: So is this bank account used by you or your mother-in-law?
THE WITNESS: We’re both, yes.
MR XU: Both.
THE WITNESS: Yes.
MR XU: Okay. So you transferred some money in your mother-in-law’s bank account to your account and used for daily expense. Is this against the original intention of setting up this account? Do you agree?
THE WITNESS: No, that’s irrelevant. I refuse to answer to this question.
SENIOR MEMBER: Well, you will answer it. It’s not irrelevant. Go on.
THE WITNESS: This account - my mother-in-law account for my daily essentials, and my account, they are both used interchangeably for my daily essentials.
MR XU: So is this against the original intention of setting up this account?
THE WITNESS: No, it’s not against.[53]
[53] Transcript of proceedings 28 November 2022, page 56 at lines 1-42
The ANZ Bank issued statements for Limei Shi’s account on the 18^th day of every second month.[54] Statement number two is for the period 18 September 2017 to 17 November 2017, suggesting the account was opened on around 18 July 2017.[55] The account had a zero balance at the end of 2017.[56] It appears Mr He began using the account to receive rent and other payments for the lessor’s properties from early January 2018, including payments from Mr Xu of $3,550 (recorded as “FROM XU JIAHAO BOND”) on 8 January 2018 and further payments of $150 and $4,200 on 15 January 2018.[57] Between 4 and 18 January 2018, amounts totalling $40,815.13 were deposited into the account and amounts totalling $34,873.23 were transferred or paid out. The first recorded transfer of funds to the lessor was $4,917.87 on 15 January 2018 followed by a further transfer of $10,000 on 17 January 2018.[58]
[54] Exhibit R1, pages 130-206
[55] Exhibit R1, page 130
[56] Exhibit R1, page 139
[57] Exhibit R1, pages 139-140
[58] Exhibit R1, pages 140-141
In the following twelve months to 18 January 2019, amounts totalling $433,465.48 were deposited into the account and $439,596.78 was paid out, of which amounts totalling $285,510.62 were paid to the lessor and Manix Property Group, a company associated with the lessor’s husband.[59]
[59] Exhibit R1, pages 143-69
In 2019, as well as managing properties for the lessor and her husband, Mr He commenced to manage other properties, including three or four properties for his mother-in-law[60] and a property owned by a person known as Mr Luo.[61] Rent from these properties was paid into Limei Shi’s bank account.
[60] Transcript of proceedings 25 November 2022, page 43 at line 16 to 44 at line 9
[61] Transcript of proceedings 25 November 2022, page 47 at line 35 to page 48 at line 5
In the next twelve months to 17 January 2020, amounts totalling $412,593.84 were deposited into Limei Shi’s account, all of which was paid out, including amounts totalling $180,355.89 paid to the lessor and Manix Property Group.[62]
[62] Exhibit R1, pages 170-96. In some case the payee is identified as “Jenny” or “MPG”
The respondent explained how he managed the funds transfers:
SENIOR MEMBER: Okay. So leaving aside the money that went into – that you paid out of, or went into your other account, what I’m trying to understand is in this account, ~~Li Mae Xi’s~~ Limei Shi’s account, as money was paid into it for properties belonging to either Li ~~Jung~~ Jiang or Manix, are you saying that you would aggregate those amounts and pay them across to Ms ~~Jung~~ Jiang or Manix?
THE WITNESS: Yes, that’s the – that’s the methodology.
SENIOR MEMBER: That was the methodology?
THE WITNESS: Yes. That’s the methodology, yes.
SENIOR MEMBER: All right. So as the money came into this account, if it belonged to Ms ~~Jung~~ Jiang or Manix, you would pay it across to them? Please translate.
THE WITNESS: No, sorry, I understand. I’m just trying to factually reply to this question. My response to you, Senior Member, is the money, not only my – not this account only. I also need to consider my other accounts. Yes. So the answer to your question is no.
SENIOR MEMBER: Well, I’m asking about this account. So money that was paid in – there were a number of tenants who were paying into this account, and I’m only dealing with transactions on this account. As money was paid into this account for – which you were collecting on behalf of Ms ~~Jung~~ Jiang or Manix, as that money came into your account, are you saying you would then pay it across to Ms ~~Jung~~ Jiang or Manix?
THE WITNESS: My understanding is no, Senior Member.
THE INTERPRETER: I will interpret, Senior Member, because I didn’t think he understands the question properly.
SENIOR MEMBER: Okay. All right.
THE INTERPRETER: So I sometimes transfer the money I receive to my other account so you need to look at both account to see if I have transferred all the rent to Ms Jung and Manix.[63] [Corrections added]
[63] Transcript of proceedings dated 25 November 2022, page 53 at line 32 to page 54 at line 3:
Limei Shi’s bank records show Mr He routinely used funds in the account to pay off his credit card and that he transferred large (in aggregate) sums to his account with the ANZ.[64] Mr He transferred money from his account to Limei Shi’s account when there were insufficient funds in the account to cover a transfer to the lessor or Manix Property Group. From early May 2019, Mr He began transferring money to the lessor and Manix Property Group directly from his own account.[65] Mr He’s bank statements show that between 2 May 2019 and 10 February 2020, he transferred amounts totalling $50,954.81 to the lessor and $103,577.86 to Manix Property Group.[66]
[64] Exhibit A3, pages 157-265
[65] Exhibit A3, page 203
[66] Exhibit A3, pages 203-45

Between 4 January 2018 and 10 February 2020, amounts totalling $886,874.45 were deposited into Limei Shi’s account.[67] The evidence does not enable me to work out how much was rent and other payments received on behalf of the lessor and Manix Property Group. In the same period, Mr He transferred sums totalling $635,317.05 to the lessor and Manix Property Group.[68] Mr He’s claim that he regularly delivered large sums in cash to the lessor and the lack of a coherent documentary record of moneys received and paid out makes it impossible to verify Mr He’s claims that he accounted to the lessor and Manix Property Group for all the payments he received on their behalf, including from the tenants of 9 Outback Street, less amounts owed to him as “wages” and reimbursement of legitimate expenses. Mr He bore the onus on this issue, which was an important element of the defence he sought to prove.
[67] Exhibit R1, pages 139-99
[68] Exhibit R1, pages 43-114
Mr He claimed he was an employee rather than the lessor’s agent because he had no independent decision making authority and did everything on her instructions. I do not have to decide whether Mr He was a casual employee working under a sham contracting arrangement, a claim he is pursuing elsewhere in proceedings under the Fair Work Act 2009 (Cth). An employee may be an agent of his employer, depending on whether the employment exhibits the indicia of agency. Critically, in this case, the evidence establishes that the lessor conferred authority on Mr He to let, collect rent and other payments, and manage her portfolio of properties, including 9 Outback Street. Whether he did so as an employee or an independent contractor is immaterial. The hallmarks of agency are present.
The statutory definition of ‘real estate agent service’ in section 8(2) of the Agents Act 2003 includes each of the following: negotiating with a person to lease land; entering into a contract to lease land; collecting payments under a lease; and managing property under a lease. Mr He was providing services of that kind for reward to the lessor in relation to 9 Outback Street and other properties she and her husband owned. Accordingly, Mr He was a person who “carries on business as a real estate agent” within the meaning of section 8(1), noting that the exceptions in section 8A do not apply to him.
I am satisfied that at all material times, Mr He acted as the lessor’s agent in relation to 9 Outback Street and was the sole point of contact between the tenants and the lessor in relation to the tenancy.
The first water bill Mr He gave the tenants was genuine
On 21 May 2018, Mr He sent a screenshot of an Icon Water invoice to Mr Xu via WeChat for the May 2018 quarter (first water bill) in which the front page and only the top half of the back page is visible.[69] The back page below the line that reads “Water consumption charges – 08/02/2018 to 08/05/2018” is omitted. Mr He said the bill was for February to June.[70]
[69] Exhibit A1, page 5
[70] Exhibit A1, pages 3-7
The following details can be seen on an enlarged copy of the screenshot.[71]
[71] Exhibit A1, page 5
On the first page, the name and address of the property owner is obscured by red markings. Mr He claimed the lessor instructed him to conceal her address.[72] The issue date of the bill is 11 May 2018. The invoice purports to be for supply at 9 Outback Street, Lawson. The account number is 1277 4770 1008. The full payment due is $1,859.51. Payment is requested by 31 May 2018. Under the heading “Summary”, the invoice records that the last bill was for $1,561.84 and that no payment was received, giving a balance carried forward of $1,561.84. New charges are recorded as $297.67, giving a total due by 31 May 2018 of $1,859.51.
[72] Transcript of proceedings 16 November 2022, page 53 at lines 9-30
The second page includes a bar chart showing a comparison of average daily water usage for the November 2017, February 2018 and May 2018 quarters. Under the heading “Current charges”, details are given of the water and sewerage supply charges for the period 1 April 2018 to 30 June 2018 totalling $160.35. The water consumption charges for 8 February 2018 to 8 May 2018 are cut off. However, the correct amount can be calculated by deducting the supply charges ($160.35) from the total new charges ($297.67) giving a figure of $137.32.
As the upstairs and downstairs premises were not separately metered, $137.32 is the total water consumption charge for 9 and 9A Outback Street for the May 2018 quarter.
The lessor denied she gave the first water bill to Mr He and said she did not recognise the account number. She said she gave him an Icon Water invoice dated 11 May 2018 for $1,561.84, a copy of which she downloaded from the Icon Water website on the first day of the hearing.[73]
[73] Transcript of proceedings 16 November 2022, page 20 at line 36 to page 21 at line 39, referring to Exhibit A1, pages 14-15
The account number on this invoice is the same as on the first water bill and relates to supply at 9 Outback Street. The invoice says on the front page, “This bill is based on estimated meter readings”. The full payment due by 31 May 2018 is $1,561.84, which is the amount carried forward in the first water bill. New charges are $341.18. The charge for water consumption is $138.25 for the period from 8 November 2017 to 8 February 2018 – i.e., the period predating commencement of the tenancy – based on estimated meter readings. Other current charges include amounts for water and sewerage supply for the period from 1 January 2018 to 31 March 2018 and interest charges for periods between 11 November 2017 and 10 May 2018.[74]
[74] Exhibit A1, pages 14-15
There is a small difference in the current charges in the first water bill – $297.67 in the first water bill compared to $341.18 – most likely because the invoice for $1,561.84 includes water and sewerage supply charges for 1 January 2018 to 31 March 2018 and estimated water use charges for 8 November 2017 to 8 February 2018, whereas the first water bill includes water and sewerage supply charges for 1 April 2018 to 30 June 2018 and water use charges for 8 February 2018 to 8 May 2018 – i.e. the immediately following periods.
The next Icon Water invoice issued on 8 August 2018 is for $2,382.73 and shows the balance carried forward from the previous bill is $1,859.51. New charges of $523.22 comprise water and sewerage supply charges for 1 July 2018 to 30 September 2018 and water consumption charges for 8 May 2018 to 7 August 2018.[75]
[75] Exhibit A1, page 16
Information published on the Icon Water website states that Icon Water bills customers quarterly but in some circumstances, accounts may be delayed, such as where it is difficult to access a water meter to obtain a current reading of water usage.[76] If Icon Water finds that it has undercharged a customer, it may adjust the account to collect the amount undercharged. Charges may be backdated for maximum of 12 months.[77] It is possible for Icon Water to issue two invoices at different times for different amounts with the same issue date.
[76] Exhibit R3, page 240
[77] Exhibit R3, page 239
The most likely reason why Icon Water issued two invoices dated 11 May 2018 is that second invoice for $1,859.51 was issued and backdated once Icon Water obtained a current reading of water usage for the relevant billing period.
I do not accept the lessor’s evidence that she gave the invoice dated 11 May 2018 for $1,561.84 to Mr He. I am satisfied the first water bill, a copy of which is at page 5 of exhibit A1, is a screenshot of a genuine Icon Water invoice issued to the lessor for supply at 9 Outback Street, backdated to 11 May 2018.
I am satisfied the lessor sent the screenshot of the first water bill to Mr He via WeChat and that he forwarded it to the tenants on 21 May 2018 with a request for payment.
The lessor instructed Mr He to charge tenants the full amount due on Icon Water invoices
Mr He claimed he did not look at the first water bill in any detail before giving it to the tenants because the lessor instructed him to charge them the full amount due:
SENIOR MEMBER: All right. So copies of the bills, the water bills that you say Ms Jiang provided to you, and which you then gave to the tenants, did you look at them?
THE INTERPRETER (APPLICANT MR HE): When I received - when I first received these bills, I only look at the bill on the top of the bills, but today is the first time for me to look at these invoices carefully, and I can prove that because, for example, I can present the first bill to the tribunal. For example, on the first invoice the due amount is around $1,500 but the real water consumption is only around $300, so the difference of $1,200 is unpaid amount from the last period. And she asked me to charge this amount from the tenants, but it is not the tenant’s obligation to pay this amount.
SENIOR MEMBER: And did you know that when you asked?
MR HE: No, I didn’t know, I only follow her instruction. Only on the due date. It was 18,000, I ask the tenants to pay 18,000. If it is 2,000, I ask the tenants to pay 2,000.[78]
[78] Transcript of proceedings 16 November 2022, page 52 at lines 29-46
Later, he said:
SENIOR MEMBER: All right. So just coming back to page 5, which is the first invoice. What do you say that – what’s your evidence about the instructions that Ms ~~Jung~~ Jiang gave you in relation to this particular invoice?
THE WITNESS: Instructions from Ms ~~Jung~~ Jiang, Senior Member. She give me the bill and ask me to cover address and ask Xu and his upstairs tenants to pay according to the full due amount which is $1,859.51.
SENIOR MEMBER: So the upstairs tenants?
THE WITNESS: Both.
SENIOR MEMBER: Yes.
THE WITNESS: Together. Together Ms ~~Jung~~ Jiang instructed me they need to pay – to pay this full amount due.
SENIOR MEMBER: All right. So, and was that a – well, how did that conversation occur?
THE WITNESS: Through WeChat.
SENIOR MEMBER: All right. And did you have a look at the screenshot to work out what the full amount due was?
THE WITNESS: Yes, I found it is $1,859.51 cents.
SENIOR MEMBER: All right. And did you notice that the bill included an amount carried forward of $1,561.54?
THE WITNESS: No, I was not – I didn’t read the details.
SENIOR MEMBER: So you claim you just didn’t look at it?
THE WITNESS: I didn’t look at – similar to the – to the page, I didn’t look at. I just took instruction for – Ms ~~Jung~~ Jiang said focus in Xu. Xu means you owe us so you ask tenants to pay and transfer money, yes.
SENIOR MEMBER: So are you asking me to believe that you looked at this document or this photograph and the only thing you saw was $1,859.51? Is that your evidence?
THE WITNESS: I have to more detail, allow me to more in detail. When the bill was handed over to me, I only focus on this full payment due. I might have looked of this as – but because of instruction I choose not to look at it.
SENIOR MEMBER: You need to be – are you saying that you deliberately chose not to look at the other information?
THE WITNESS: Not deliberately. I was instructed not to look, just focussing on the full payment due.[79] [Corrections added]
[79] Transcript of proceedings 25 November 2022, page 78 at line 5 to page 79 at line 14
Mr He claimed the lessor always instructed him to charge tenants the full amount due on water bills for her properties. Mr He said he never questioned the legitimacy of the water bills or whether tenants were liable to pay the full amount due.[80] The reason for this will become clear shortly.
[80] Exhibit R2, page 2 at [2]
The lessor gave the following answers in cross-examination by Mr He:
MR HE: My next question is, you know that your 12 houses, including this one, has no separate meter. You are not allowed to charge any of the tenants’ water bill, including sewage and consumption. Do you know this?
MS JIANG: To the Senior Member, I think real estate agents should tell me this, because I don’t have any background as a real estate agent. They should pay my rates, they should pay my land taxes, and they should get my water accounts fixed as well. So that’s my understanding as a real estate agent what they should do, but if I make a mistake – because I don’t have any background. So I was just informed by a real estate agent. It’s like I’m dealing with any real estate agent now. They will let me know what’s going to happen and, if we’re doing something wrong, that we have to correct it and, like, that’s how I see – the house should be managed this way.
MR HE: Thank you, Ms Jiang. On 28 May 2018 Mr Xu transferred the water bill of $1,302 and the next day I transferred the exact amount to you. Are you aware of this?
MS JIANG: As I requested so many times – of the statement stating what they are for. Dr He always refused to provide them, saying he was running a small business. So even though he did transfer, I don’t know what’s that for. That’s my answer to your questions. You didn’t put any prescription on the water for 9 Outback Street – or 9 Outback Street.
MR HE: Thank you, Ms Jiang. When your houses was built brand-new, it attracts a large amount of water fees and you transferred all of this to the tenants and asked me to pay. Do you agree?
MS JIANG: No, I don’t agree. The agent should have calculated how much the tenants should pay. That’s their job, because it’s not my job to tell agent what they should request tenant to pay.[81]
[81] Transcript of proceedings 17 November 2022, page 80 at line 20 to page 81 at line 3
I strongly doubt the lessor looked to her agents for advice about how much tenants should be charged. I also doubt the lessor’s last answer is true. Mr He produced receipts for payment of water bills made in April and May 2018 by tenants of properties he was managing for the lessor and Manix Property Group. Some were as high as $2,878.60 and $2,785.70 to Manix Property Group and $4,500 to the lessor.[82] I find it hard to believe these amounts are justifiable as legitimate charges for water usage by tenants.
[82] Exhibit R2, pages 20-22
The lessor may have been ignorant that a lessor is responsible to pay water and sewerage supply charges and may charge for water usage only if the premises are separately metered. However, her evidence that she expected a real estate agent “should pay my rates, they should pay my land taxes, and they should get my water accounts fixed as well” carried the ring of truth. I am satisfied that in her dealings with Mr He, the lessor looked to him to recover payment from tenants of the full amount of any Icon Water invoices she gave him.
I am satisfied that when the lessor sent Mr He the screenshot of the first water bill, she instructed him to charge the tenants of 9 and 9A Outback Street the full amount due – i.e. $1,859.51. The fact the invoice included amounts owing for a period predating the commencement of the tenancy is unlikely to have escaped her notice, or if it did, it could only be because she was indifferent to this and expected payment regardless.
The lessor received payment in full for the first water bill
Mr He arranged for Mr Xu to pay $1,302 into Limei Shi’s account as the tenants’ share of the first water bill. Mr Xu made two transfers on 28 May 2018 – $1,302.00 for the water bill and $4,500 for the June rent.[83]
[83] Exhibit R1, page 153
Mr He transferred $1,302 from Limei Shi’s account to the lessor on 30 May 2018.[84] The receipt for the electronic funds transfer refers to “Water outback”.[85] The upstairs tenants paid $568.53 by electronic funds transfer to the lessor on 30 May 2018 as well. The receipt for the electronic funds transfer refers to “water outback”.[86] The premises at Number 9 and Number 9A was the only property on that street managed by Mr He on behalf of the lessor.
[84] Exhibit A3, page 166
[85] Exhibit R2, page 21
[86] Exhibit R2, page 14
I am satisfied the lessor received payment in full for the first water bill. I do not accept the lessor’s evidence to contrary.
The lessor “incentivised” Mr He to not question water bills for her properties
Mr He admitted on the third day of the hearing that he saw the balance carried forward in the first water bill was $1,561.84 and that new charges amounted to $297.67. He explained why he nevertheless asked the tenants to pay the full amount as follows:
SENIOR MEMBER: All right. So when you look at page 5, you can see, can you not, that there is an amount carried forward of $1,561.84.
THE WITNESS: Yes.
SENIOR MEMBER: So you can see that now?
THE WITNESS: Yes, I can see it now.
SENIOR MEMBER: Right. And are you asking me to believe that you didn’t see that or look at that before asking the tenants to pay?
THE WITNESS: I think I saw the – all the summary of the bills, but - - -
SENIOR MEMBER: So you saw that.
THE WITNESS: Yes.
SENIOR MEMBER: Right. Well, if you saw the summary of the bill, do you agree that what you must have seen was that the balance carried forward from an earlier bill was $1,561.84, correct?
THE WITNESS: Yes. If I – when I saw it, yes.
SENIOR MEMBER: And you must have seen the new charges were $297.67. Do you agree?
THE WITNESS: Yes.
SENIOR MEMBER: Right, and that’s something you saw at the time.
THE WITNESS: Yes.
SENIOR MEMBER: Well, having seen that, why did you ask the tenants to pay $1,859.51?
THE WITNESS: There are two reasons that I do that.
SENIOR MEMBER: Right.
THE WITNESS: One, as I reiterate is a direct instruction from Ms ~~Jung~~ Jiang to pay according to the full payment due.
SENIOR MEMBER: Yes.
THE WITNESS: The second reason is also important, is because I always pay full amount, so that carry forward in my bill is always a zero. When I saw Ms ~~Jung~~ Jiang, because I – at that time I only have my own Icon Water. I don’t have anything to comparison. I thought Ms ~~Jung~~ Jiang might have a different standard with their relationship to Icon Water because by 2018 I only – I have no other Icon Water to compare. The only water bill is from the place I live, so I have some suspicion back then, but I didn’t go further because this is not my bill and this is not my property either. I just follow and it said due, so the translation of due into Chinese looks very – very serious for me. You have to pay, otherwise you will have debt, and that’s two reasons when I saw, yes. Yes. [Corrections added][87]
[87] Transcript of proceedings 25 November 2022, page 86 at line 17 to page 87 at line 25
Asked to explain why he required the tenants to pay the full amount when he knew their tenancy commenced on 1 February 2018, Mr He said:
THE WITNESS: Because I didn’t know, Senior Member.
SENIOR MEMBER: That doesn’t make sense, Mr He, because you have told me that you saw the summary of the bill at the time.
THE WITNESS: Yes, I saw the summary at the time, but I didn’t give a second thought. I just thought, ‘Oh, this is – this is just the bill’, according to the full payment due, and I – I – and doesn’t require me to pay anyway so I didn’t give a duty of care to go through every detail.
SENIOR MEMBER: And why not?
THE WITNESS: This is not my bill firstly. Secondly, I do not get any profit by collecting water.[88]
[88] Transcript of proceedings 25 November 2022, page 88 at lines 26-39
Pressed to explain why he did not make enquiries to the lessor about payment of the past due amount for which he knew the tenants could not be responsible, Mr He said :
SENIOR MEMBER: Because Ms ~~Jung~~ Jiang has told you to, well, let me just clarify. All right, so I think you have told me that Ms ~~Jung~~ Jiang instructed you to obtain payment of the full amount due. You just decided not to ask any further questions. Is that right?
THE WITNESS: I didn’t ask. Can I – can I say why?
SENIOR MEMBER: Yes. Yes.
THE WITNESS: Yes.
SENIOR MEMBER: I want to understand why.
THE WITNESS: Yes. By the time the bill comes in the mail, the first bill comes on 11 May 2018. The property Xu rented I believe is about the third or the fourth property that I manage, I helped or managed, helped Ms ~~Jung~~ Jiang and Ms ~~Jung~~ Jiang on a daily WeChat, she instructing me, ‘Michael, if you work harder I have at least another 30. Can you do everything as I told I will give you more and more property, but you have to work harder or efficiently. If I give you bill, you ask for tenants to pay. If you can finish the tasks, I will give you more and more’. She incentivised me to not ask question, so I mean, in – in hindsight I was suspicious, but because I received a different bill, the bill I received from the place I live and the bill I received for the investment property has a different content of summary. So for the townhouse I only got sewerage bill, but for the property I live I got both sewerage bill and consumption bill because mine is a separate title, and an investment property is only a town – it’s a body corporate. It’s not a separate title, so I can’t – I think maybe it’s another different bill by comparison. So that’s my answer to you, Senior Member.[89] [Corrections added]
[89] Transcript of proceedings 25 November 2022, page 89 at line 32 to page 90 at line 13

Mr Xu said some of his flatmates expressed doubt about the first water bill and thought they were responsible to pay the new charges only. This prompted Mr Xu to ask Mr He on 1 June 2018 for a full copy of the bill and again on 4 June 2018. Mr He refused the first time and, the second time, claimed the lessor did not give him a full copy.[90]
[90] Exhibit A1, page 55
Mr He did not dispute Mr Xu’s evidence. Whatever Mr He’s state of mind may have been when he asked the tenants to pay the first water bill, shortly after receiving payment he was questioned whether the tenants were liable to pay the past due amount. I do not accept that Mr He did not realise then, if he did not already know, that in fulfilling the lessor’s instructions he was charging the tenants an amount they were not liable to pay. Mr He claimed, in hindsight, that he was suspicious. An honest person would have sought clarification from the lessor and insisted on obtaining a full copy of the bill, although it was obvious from the screenshot Mr He had in his possession that it included amounts for which the tenants could not be liable. Instead, Mr He’s first reaction was to refuse to do so and, when asked again, claimed the lessor did not give him the bill. I doubt whether Mr He even asked for a copy of the bill, because it was not in his interests to do so.
I am satisfied that what might at first have been explained as an honest mistake, in fact demonstrates Mr He was recklessly indifferent to whether the lessor overcharged the tenants for water bills because she “incentivised” him with promises of more properties to manage if he did her bidding. Thus, Mr He was complicit in giving effect to the lessor’s dishonest purpose.
Mr He claims he had no choice but to keep working for the lessor after she reduced his “wages” in August 2018
Initially, Mr He was paid a management fee of 10% of the rent he collected. In August 2018, the lessor reduced the fee to 5% fee for two new properties in Lawson. In early 2019, she reduced the fee for all her properties to 4.5% and then 4%.[91]
[91] Exhibit R2, page 30 at [28]
Mr He said, “from 2019, the labour fee per week was significantly reduced by Ms Jiang from fifty dollars a week to about 20-30 dollars” – which I understand refers to the fee payable per property rather than in total – and that “we no longer felt this is enough for our living given the significant amount of time we invested on servicing their properties”.[92] Elsewhere he said:
For the entire year 2019, I and [Mr He’s wife] together received about an $1000 wage per month from Ms Jiang for helping and maintaining her varying 30 properties, including Mr Xu’s.[93]
In oral evidence, Mr He said that in his first year of working for the lessor “sometimes I can receive $3,000, $4,000 a month”.[94]
[92] Exhibit R2, page 45 at [30]
[93] Exhibit R2, page 25 at [15]
[94] Transcript of proceedings 28 November 2022, page 33 at line 32
Mr He said from August 2018 he no longer wanted to work for the lessor because “I don’t think the wage reflect my hard working”.[95] He explained how this came about:
That’s why she’s very happy with my first year as a performance, because I helped her furnish all the properties, all the garden, communicate with tenants. She’s very happy, but subsequently she realised 10 per cent is too much, so from – I think from August 2018 she start to offer 5 per cent only. Then subsequently she reduced to 4.5 per cent and eventually to 4 per cent. I was extremely angry and upset for her reduction on my rent without my agreement. I noticed there’s no agreement because I asked to sign and she refuse. I feel I was heavily exploited. I don’t want to work for her any more.
…
But when she decided the 4 per cent lots of the properties I already secured the tenants, and I can only give the wage of 4 per cent through the collection of the rent. If I refuse her, even the 4 per cent for me, I couldn’t get it because the wage only from collection of the rent, but deep from the bottom of my heart I was extremely not satisfied. I feel this person is very bad person. I work so hard for the family, work day and night. Often I work until 1 am, especially in February and June because that’s the peak season for international students, so while I am here is 11.00 am – 11.00 pm in China. So to secure those international students I work day and night, weekends and the week days. Instead she reduced my wage and I feel I was treated as animal and don’t respect me at all. So what did I do after I have this anger and this frustration I feel? I was treated as – as a dog treating, asking me to go, and because she own – does – you own your property, doesn’t mean you can do anything upon me. I have huge mental distress during this time, but I sucked those negativity because I knew if I burst – if I officially say, ‘Okay, so I don’t work for you’, I will lose even that 4 per cent which is about $1,000 per month. That’s a lot of money for my family back then, so I – so I sucked those – absorbed those anger.
… So for all the task she asked me to do, I know she will no longer hire me from 2019 so she start to take back all of her properties, even the properties I already found tenants for her, so she would direct the – the tenants directly and direct to the tenants to transfer money to her directly … She gradually took back most of properties.
By the time they reached to the August or September 2019, there’s only about two to three or four properties left already because she took all of the remaining properties…[96]
[95] Transcript of proceedings 28 November 2022, page 35 at line 27-28
[96] Transcript of proceedings 28 November 2022, page 32 at line 14 to page 33 at line 15
Mr He claimed he had no choice but to keep working for the lessor :
THE WITNESS: What I mean is, I don’t think the wage reflect my hard working. For example, normally my interest I will protect my employer interest if I was rewarded. For example, when the first year’s tenant finished the contract, they want to renew but I knew Ms ~~Jung~~ Jiang would not treat me well and she will reduce a wage for me, even for the same tenants for first year. Nothing change, but she will reduce me as from 10 to 4. I would encourage the tenants do not live here, fine find a new place. It’s not worth it. The landlord will take away your bond. Be careful. I will talk to tenant. I will encourage them to move out … She doesn’t appreciate my work so I don’t work, but the reason is I have no choice because my wage is only coming from the collection of the rent. If that is not a condition for me, the relationship will probably end in August 2018 already when they start to reduce my wage.
SENIOR MEMBER: When you say you had no choice, was that because you needed the money to save for - - -
THE WITNESS: For my house, yes, because I have two children When I came to Canberra from Laos, I was living in a very small townhouse. Is not soundproof, and is very little, and by that time, because back in China I was a professor, so I saved some money, but it’s not enough to buy a big house. So my strategy is to cash ~~buyer~~ buy a small townhouse, so at least if I lost my job, my family has some place to stay … By that time my son was three and my wife was pregnant, but deep in my heart I always want a bigger house because it’s my responsibility as husband and father. So I started to work very hard. So I will also cleaner so in daytime and nights I will cleaner. In daytime I will be ACT Government graduate, and night hours work for ~~Jung~~ Jiang, so I do everything I can to save money.
…
So that combined together would give me enough funding to build a decent house for my two kids and – and my mother-in-law and my parents. So in that situation, I no longer feel I want to work for Ms ~~Jung~~ Jiang. For me it’s – I don’t think it’s worthwhile, so whenever she ask – she will ask me, ‘Michael, here’s a water bill’, or, ‘That door is broken. Come to fix it’, I said – I just said – I just ignore her. I said, ‘You give me 4 per cent and you ask me to do all of these things?’, and she will say, ‘You’re my agent. You should do exactly as I told you’. I said, ‘No agent will mow for you. No agent will garden for you. That’s all extra, you know, are you joking? You think I’m – I’m as a first year, you think I’m – I don’t know? Now I learned what is a licensed real estate agent’s roles and responsibilities now. Do not, you know, try to pressurise me. Firstly I maybe do that because of 10 per cent. Now is only 4 per cent. I will not do that for you and I wish our relationship to end as early as possible’. So that’s my mindset from August 2018 already, the first moment she reduced – start to reduce my age – reduce my wage unilaterally and non-consensually. [Corrections added] [97]
[97] Transcript of proceedings 28 November 2022, page 35 at line 27 to page 36 at line 12
It is immaterial whether Mr He genuinely believed he had no choice but to keep working for the lessor. The deterioration in Mr He’s relationship with the lessor, his resentment at her treatment of him, his belief she was actively taking steps to deprive him of income he believed he had earned, and his determination to fund the purchase of a large home, is significant. Where dishonesty is alleged, it is natural to look for a motive. In assessing whether evidence of dishonesty meets the civil standard of proof discussed in Briginshaw, the obvious question is why would be a person commit an act of dishonesty if they had no reason or motive to do so? In this case, the abovementioned circumstances provided ample motive.
The second water bill for which Mr He charged the tenants was a fake
On 22 November 2018, Mr He sent a screenshot of the front page of an Icon Water invoice for $1,947.02 to Mr Xu via WeChat for the November 2018 quarter (the second water bill) and asked him to pay $1,298 into Limei Shi’s account.[98] Mr Xu did so when he paid the next month’s rent.[99]
[98] Exhibit A1, pages 8, 9
[99] Exhibit A1, page 55
The following details can be seen on an enlarged copy of the screenshot.[100] The name and address of the property owner is obscured by Mr He’s thumb and fingers. Only the postcode (2612) is visible. The issue date is 8 November 2018. The invoice purports to be for supply to 9 Outback Street, Lawson. The account number is 1276 6924 1000, which is different to the account number on the first water bill and does not relate to supply at that address. Payment of $1,947.02 is requested by 29 November 2018. Under the heading “Summary”, the amount of the last bill is shown as $3,585.68, which was paid in full. New charges are recorded as $1,947.02. A reversed image of printing on the back of the invoice is visible through the front page.
[100] Exhibit A1, page 8
These amounts bear no relationship to the genuine Icon Water invoice dated 8 November 2018 downloaded from the Icon Water website. The amount due is $638.35 comprised entirely of new charges. The amount of the last bill is $2,382.72, which was paid in full.[101]
[101] Exhibit A1, pages 17-18
All Icon Water invoices have a unique code printed vertically in the left-hand margin on the front page adjacent to “Balance” and on the back page adjacent to “Billing services provided …” The code E-4859 S-7011 I-14021 is printed in the left hand margin of the front page and E-4859 S-7011 I-14022 on the back page of the genuine 8 November 2018 invoice.[102] The code printed in the margin of the second water bill is E-4765 S-6904 I-13807,[103] which is identical to the code printed in the margin of the Icon Water invoice for 17 Sliprail Street dated 8 November 2018,[104] a property Mr He was managing at the time. A further similarity is that the last bill amount ($3,585.68) and payment received ($3,585.68 CR) in the second water bill are the same as in the invoice for 17 Sliprail Street. The account number on the second water bill is the same as the invoice for 17 Sliprail Street, except the last digit, which is zero instead of nine.
[102] Exhibit A1, pages 17, 18
[103] Exhibit A1, page 8
[104] Exhibit A6, page 557
I am satisfied the second water bill is a fake, created from an electronic copy of the genuine invoice of the same date for supply to 17 Sliprail Street.
The rent increase from February 2019
On 28 November 2018, Mr He told Mr Xu the lessor wanted to increase the rent by $100 to $1,150 per week in the second year. Earlier, Mr He had mentioned the rent may increase between $100 and $300 per week.[105] Mr Xu agreed to pay an extra $100 per week and, at Mr He’s request, on 28 November 2018 paid $400.00 into Limei Shi’s account as “deposit for rent”, bringing the total amount paid as bond to $4,600.[106]
[105] Exhibit A1, page 55
[106] Exhibit A1, pages 30, 44, 55
The same day, Mr He transferred the $400 to an account in his wife’s name.[107] There appears to be no rational explanation why Mr He transferred the money to his wife instead of to the lessor.
[107] Exhibit A2, pages 2-3
On 29 January 2019, Mr Xu paid $4,600 into Limei Shi’s account for the February rent, reflecting the $100 rent increase to $1150 per week.[108] The payment appeared in Limei Shi’s account on 30 January 2019, the same day Mr He transferred $589.00 to his own account and $4,011.00 to the lessor’s account. The screenshot of the Excel spreadsheet Mr He gave the lessor for February 2019 records “income” for 9 Outback Street as $4,011.[109] Mr He was entitled to charge a fee of 4.5% of the rent, which was $189 based on four weeks rent at $1,050. There was no evidence Mr He had any legitimate entitlement to the extra $400 he paid himself. Although Mr He claimed the extra rent was included in lump sums he transferred to the lessor’s account or paid her in cash, he could not explain why he did not do so immediately upon receipt of the rent, instead of transferring $4,011 to the lessor and the rest to himself.
[108] Exhibit A1, pages 32, 56
[109] Exhibit R2, pages 26; Exhibit R3, page 225
These events coincided with the lessor publicly accusing Mr He of dishonesty. Mr He’s wife, Qian Zhao, said that in February 2019 the lessor “announced to the tenants to stop Mr He’s work without giving any early notice. In her announcement, she damaged Mr He’s reputation and misled tenants by saying he was a real estate agent who had serious integrity issues”.[110] This refers to a message the lessor sent via WeChat to tenants that said in part, “There are some major honesty issues with the agent, so I will not use him anymore. I will send the notifications for rents from now on. Please transfer your rent to my account”.[111] Despite this, Mr He continued to manage 9 Outback Street and several other properties for the lessor and her husband.
[110] Exhibit R3, page 226 at [11]
[111] Exhibit R1, page 27
Coincidentally, in mid-February 2019, Mr He began using a different corporate WeChat account, under the name “Canberra Renting”.[112]
[112] Exhibit A1, pages 56, 60, 61
On 25 February 2019, Mr He informed Mr Xu via WeChat that rent for March would be $4,871.42.[113] Although Mr Xu and the other tenants did not realise it, the rent was charged at $1,110 per week, an increase of $50 rather than $100 per week. Subsequently, towards the end of each calendar month Mr He would inform Mr Xu via WeChat how much rent to pay for the next month.[114] The evidence shows rent from March 2019 was charged at $1,100 per week.[115] February 2019 was the only month in which rent was charged at $1,150 per week.[116]
[113] Exhibit A1, page 34
[114] Exhibit A1, pages 34-43
[115] Exhibit A1, pages 56-57
[116] Exhibit A1, page 56
Mr He gave the lessor an Excel spreadsheet for April/May 2019 showing rent received for “9 Outback Lower” in April was $4,714.30, corresponding with the amount the tenants paid.[117] Mr He claimed he accounted to the lessor for the rent increase, less his “wages” and authorised expenses, over the following twelve months.[118]
[117] Exhibit R2, page 28
[118] Exhibit R1, pages 33-35
Mr He said the initial rent increase of $100 per week and the subsequent reduction to $50 per week came about in the following circumstances:
In late 2018, Ms Jiang instructed me to pressurise tenants to accept her increased rent for ALL her 30 properties, otherwise they will face eviction … including 9 Outback Street Lawson. I much feared of her pressure and passed on the message to Mr Xu, and Mr Xu told me he would need to consider this …
In more details: For Mr Xu’s property, to my memory Ms Jiang realised in late 2018 international students’ rental market might not as good as she thought. She first instructed me not to increase any rent, keeping it as $1050 as 2018 to attract Mr Xu’s continuous stay. She instructed to deal with Mr Xu and have the lease signed with Mr Xu. She also provided me with the lease document template that she asked me to use.
However, Ms Jiang quickly change to decision, and instructed me to cancel the signing. She told me “Your signing does not mean anything as you are neither a real estate agent nor a lessor”. She consequently demanded me to DESTROY $1050 lease (I believe Mr Xu signed the lease) and wanted an additional $100 per week increase for 2019 if Mr Xu wanted to stay. At this time, my conscience had been severely hurt by Ms Jiang’s greed. I did not want to follow her instructions, but I was very fearful that Ms Jiang’s and her family’s ongoing financial abuse and violence on me.
Felt a deep repugnance of Ms Jiang’s greed, in late 2018, I passed onto Mr Xu of Ms Jiang’s instructions. I told Mr Xu I was only working under Ms Jiang’s direct control, and I do not make any decisions. And I voluntarily helped Mr Xu look for new properties in Franklin in late 2018 as I was concerned Mr Xu’s homelessness. Unfortunately, Mr Xu did not find one to his satisfaction …
Mr Xu then agreed with the $100 increase per week and transferred the $400 on 28 November 2018. I then transferred this to Ms Jiang in late Nov-Dec 2018 in lump sums … In that lump-~~son~~ sum, the amount is $36,444.67 to Ms Jiang’s two accounts.
Mr Xu’s rent payment in Feb 2019 is $4600, which is $100 more per week as Ms Jiang instructed. We then transferred this to Ms Jiang together with other of her properties rent ($49,769), excluding cash delivery and the amounts that tenants paid directly to Ms Jiang, minus my wage 4% of collected rent, and minus her approved cost of house maintenance appliances such as shower lights, fridges and washing machines.
In March 2019, Mr Xu changed his mind and only agreed to pay $1,100 a week, not $1,150. I forwarded this to Ms Jiang. She agreed. All of Mr Xu’s rent was sent to Ms Jiang in lump-sums, minus my wage 4% of collected rent, and minus her approved cost of house maintenance appliances such as shower lights, fridges and washing machines. [Original emphasis. Corrections added][119]
[119] Exhibit R2, pages 24-25 at [7]-[13]
Mr He gave oral evidence to similar effect.[120] In cross‑examination by Mr Xu, Mr He admitted telling the tribunal at a directions hearing on 18 March 2022[121] that he was not aware the rent had increased in the second year.[122] He denied negotiating with the lessor in relation to the rent increase, claiming “I do not negotiate; I just pass information”.[123] However, earlier on the second day of the hearing Mr He said, “it was actually the landlord who forced me to increase the rent to $100 but I negotiated to $50 per week”,[124] an allegation the lessor denied.[125]
[120] Transcript of proceedings 28 November 2022, page 27 at line 1 to page 29 at line 23
[121] Exhibit A6, page 588 at lines 45-46
[122] Transcript of proceedings 28 November 2022, page 50 at line 22 to page 51 at line 9
[123] Transcript of proceedings 28 November 2022, page 51 at lines 17-42
[124] Transcript of proceedings 17 November 2022, page 54 at lines 40-42
[125] Transcript of proceedings 17 November 2022, page 71 at lines 42-47
Mr He’s wife, Qian Zhao, said she overheard a telephone call in which the lessor asked her husband “to raise all the rent of her properties at least $100 plus”.[126] She confirmed this in her oral evidence:
MS ZHAO: Yes. I remember that Ms ~~Jung~~ Jiang called Mr He many times at the end of 2018. She always liked to call Mr He to give instruction. She asked Mr He to tell all the tenants to - she would like to increase the rent in 2019.
SENIOR MEMBER: And how do you know that she asked Mr He to do that?
MS ZHAO: Because I heard the phone call between them, so that’s why I know they talk about the rent increase.
SENIOR MEMBER: And how many phone calls of that kind were there?
MS ZHAO: In my memory, at least four to five times.[127] [Corrections added]
[126] Exhibit R3, page 226 at [5]
[127] Transcript of proceedings 28 November 2022, page 74 at lines 8-20

After speaking with Mr Xu, Ms Chen went to the house at about midnight on 30 January 2020 to check whether Mr He had done a proper job. She found the house unlocked. When she left, she locked the house and left the keys in the letterbox.[199]
[199] Exhibit A1, page 62
Ms Chen returned to the house about midday on 31 January 2020 to leave notes (which she described as “tips”) around the house and in the letterbox asking the landlord to contact her and giving her contact details.[200] Mr He must have looked in the letterbox because he found Ms Chen’s note.[201]
[200] Exhibit A1, page 62-63
[201] Exhibit R1, page 21
At 8:13 pm on 31 January 2020, Mr He contacted Mr Xu via WeChat. In the following translation A is Mr He and B is Mr Xu:
A: Do you lock the door? The cleanser can’t enter the house. We can’t be responsible for this. Don’t you want your bond!!
[Video]
Please reply. We cannot enter.
B: There is one key in the mailbox. See what you say. You must have the bond?
A: Why don’t you believe me. The bond is not in my possession. Tonight is the last night for cleaning. You lock the door. The cleanser left.
B: You can come back next time.[202]
[202] Exhibit A1, page 98
According to Mr Xu, after being told the keys were in the letterbox Mr He left the house and said he would delete Mr Xu from his WeChat account. The next day – i.e. on 1 February 2020 – Mr Xu discovered he was blocked from Mr He’s WeChat account.[203]
[203] Exhibit A1, page 58
Mr He claimed he and the cleaner were locked out on 31 January 2020 before they could finish the job. Mr He claimed that when Mr Xu told him a key had been left in the letterbox, he checked and did not find any keys but found a note left by Ms Chen.[204] However, in a WeChat conversation with the lessor the next day, which is reproduced later in paragraph 203, Mr He told the lessor “The keys, they said they were in the doormat. We didn’t check”.[205]
[204] Exhibit R2, page 35-36; Exhibit R5, page 14 at [30]
[205] Transcript of proceedings 28 November 2022, page 65 at lines 23-45
David Wang took over from Mr He as the managing agent of 9 Outback Street from 1 February 2020 and conducted a final inspection of the property. He did not mention any difficulty in obtaining access to the property. He found the house had not been cleaned properly, which he reported to the lessor. He also found a note from Ms Chen in which she asked the lessor to contact her on her mobile number about the bond. He forwarded the number to the lessor.[206]
[206] Transcript of proceedings 17 November 2022, page 91 at lines 39-44
Mr He claimed he and the cleaner did the best they could to clean the house to Mr Xu’s satisfaction.[207] He said photographs taken before[208] and after cleaning proved the condition of the premises.[209]
[207] Exhibit R2, page 35 at [6]
[208] Exhibit R1, page 2-10
[209] Exhibit R1, page 11-19
However, Mr Xu disputed that the photographs at pages 4, 5 and 6 of exhibit R1 were of the premises.[210] Mr Xu said the toilet is not on the right hand side of the bathroom as appears in the photograph at page 4. The kitchen sink is in a different position than appears in the photograph at page 5. The dishwasher was under the sink, not under the stove as appears in the photograph at page 6. Mr Xu also pointed out that the black Audi motor vehicle that appears in the photograph on page 10 was his and that he sold the vehicle in mid-2019 before returning to China. It could not have been there on the day Mr He claimed to have done the cleaning.
[210] Transcript of proceedings 28 November 2022, page 85 at line 12 to page 86 at line 29
Mr He responded that the photo of the vehicle was “just to show to the member that that is the premises me and the cleaner went in. You can see, just to demonstrate to you, that is the address”.[211] However, this is not what Mr He said in his written statement, where he described the photographs at pages 2-10 as the premises “before the cleaning”.[212]
The lessor contacted Ms Chen about the bond
[211] Transcript of proceedings 28 November 2022, page 89 at lines 20-22
[212] Exhibit R2, page 35 at [6]
As mentioned earlier, Mr Wang forwarded Ms Chen’s mobile phone number to the lessor after finding her note.[213]
[213] Exhibit A1, page 71, Transcript of proceedings 17 November 2022, page 91 lines 39-44
At 7:19 am on 1 February 2020, Ms Chen received the following text message from “Jennie”. This is similar to the anglicised name by which the lessor is known (“Jenny”) but spelled differently. “Nancy” is the name she used when she left her contact details at the house[214] and is the name by which she was known while living in Australia:
Dear Nancy, we are the owners of the house that you and your friends rented. Your lease is ending today 1 Feb 2020. We hold your bond $4200. Our staff have inspected the house and found a number of wall damages. You will also need to pay the water fees. After all is deducted, you will be receiving the remaining bond. As the water cycle bill hasn’t come out yet we will use your previous bill as a guide. You would need to pay the water bill for the last few months since November 2019. We would also need your name, bsb and account number for the transfer. Please nominate them at your convenience. Please do not hesitate to contact us for further questions. Stay away from the heatwave. Take care. Jennie with thanks.[215]
[214] Exhibit R1, page 21
[215] Exhibit A1, page 49
Ms Chen replied at 10:38 am:
Dear Jennie, thank you very much for contacting us!
There are several points we would like to discuss with you.
First, we apologise for the damaged walls, and would like to know how much we should pay for them?
Second, regarding the water bill, should we share the bill with the upper floor since we share a same water meter?
Third, in terms of the house cleansing and the furniture, we have paid 1200 dollars to the agent Mark [possibly this is a misspelling of ‘Mike’] and he guaranteed that he would clean the house (including the weeds in the yard) and deal with the furniture we left. Therefore, if there are any problems concerning the house cleansing and the furniture, please contact him for dealing with them.
Following is our bank information …
Thanks again and take care, too.[216]
[216] Exhibit A1, page 49
Ms Chen sent a follow up text asking for details of the approximate cost of the water bill.[217]
[217] Exhibit A1, page 50
“Jennie” replied at 2:42 pm:
What a pleasure to hear from you in such a scorching day! Nancy. Here are our response:
1. Your nominated bank details are noted.
2. The cleaning will not be your problem as we will talk about this to your cleaner.
3. You will only need to cover the wall and the shared water bill.
4. Yes, your water usage will be shared with upstairs. It will be approximately $1200 on your side. We will return any surplus if it is under $1200, and you would need to pay us any outstanding balance if it is over $1200.
5. With regard to the wall at the three bedrooms, the quotations from a handyman is $300 – $600 each. There are also other damages to the house and we will keep you updated. This is a brand-new house when we handed over.
6. The furniture you mentioned are all dirty, broken, dilapidated and unusable. They stink! They should be taken out immediately. We have organised this and have billed this to the cleaner. No cost on your side.
7. The new tenants are moving in today therefore we have to arrange this as a priority.
8. We have sacked the current real estate agent and we would appreciate if you deal to us directly.
We will deposit around $1,800 to your nominated account early next week. I will talk to my hubby and other family members on this matter.
We are on our way to Sydney. We will be back early next week. Jennie[218]
[218] Exhibit A1, page 50
Later Ms Chen thought Mr He was the author of these texts, apparently encouraged in that belief by the lessor who claimed the messages did not come from her. Ms Chen speculated that Mr He must have discovered one of the notes she left in the house and decided to impersonate the lessor although why he would do so at that time and in those terms is not apparent.[219] Considering Mr Wang’s evidence about finding Ms Chen’s note and passing on her contact details to the lessor, presumably early in the morning on 1 February 2020, the content and timing of the text messages between “Jennie” and Ms Chen and the content and timing of the WeChat conversations between the lessor and Mr He the same day, leads me to conclude it is highly improbable that the text messages were written and sent to Ms Chen by anyone other than the lessor. In the end, nothing of significance to the outcome turns on this, save that it is one of the reasons for my caution in giving any weight to the lessor’s evidence except in the limited circumstances mentioned earlier.
Deductions from the bond for the cost of cleaning and garden maintenance
[219] Exhibit A1, page 49
The lessor and Mr He were in contact via WeChat during 1 February 2020 to discuss the amount the lessor should deduct from the bond for water usage and garden maintenance.[220] Mr He disputed the accuracy of the translation at page 596 of exhibit A6 of a conversation via WeChat between Mr He and Li Jiang at 2:16 pm on 1 February 2020.[221] This led me to ask the translator to give a word-for-word translation, which follows:
[Lessor]    What time today can 9 Outback go to check?
[Mr He]    I’ll ask the cleaning lady.
[Mr He]    The keys, they said they were in the doormat. We didn’t check.
[Mr He]Their grass not removed. Hope from deposit [bond] inside deduct costs. All back country. Room inside furniture they don’t want either.
[Mr He]“In this case I let them go check. We give you the feedback about the situation. Cooperate. We do the last bit of work.” You say this is okay, but you will deduct them 4200 deposit [bond].
[Lessor]When did I mention to deduct the deposit [bond]?[222]
[220] Exhibit A6, pages 567, 568, 596, Transcript of proceedings 28 November 2022, page 67 at line 15 to page 70 at line 24
[221] Transcript of proceedings 28 November 2022, page 67 at lines 9-13
[222] Transcript of proceedings 28 November 2022, page 67 at line 15 to page 70 at line 24
In the late afternoon on 1 February 2020, Ms Chen received a telephone call from Mr Wang, who introduced himself as the lessor’s agent. He said the house was dirty and that the tenants needed to arrange another cleaner as they had been unable to get in touch with Mr He.[223] There is no evidence Mr Wang knew the lessor had been communicating with Mr He that day.
[223] Exhibit A1, page 63
Mr Wang arranged for the cleaning and garden maintenance to be done by Ming Cho (known as “Leslie”) on 9 February 2020. Mr Cho took extensive photographs showing the dirty condition of the premises.[224] In his witness statement, he described the condition of the house as “very dirty” and the garden as “totally a mess”. He said the house was “barely cleaned” and that all cabinets, windows, sinks, floor tiles, garage, laundry, range hood and oven remain dirty.[225] His oral evidence to the Tribunal was to the same effect. He confirmed he charged $1,200 to clean the house and $600 for the garden.[226] I accept his and Mr Wang’s evidence about the condition of the property.
[224] Exhibit A1, pages 73-89, 99-118
[225] Exhibit A1, page 72
[226] Transcript of proceedings 17 November 2022, page 83 at lines 10-13
The lessor returned the balance of the bond by making an electronic funds transfer of $2,170.80 to Mr Xu’s bank account on 9 March 2023. From the bond amount of $4,200, the lessor deducted $1,800 for the cleaning and garden maintenance and $229.20 for water consumption.[227] The Icon Water invoice dated 12 February 2020 included water consumption charges of $305.61 for the period from 8 November 2019 to 11 February 2020.[228] It appears the tenants agreed to pay three-quarters.[229]

The elements of the tort of deceit

[227] Exhibit A5, page 555
[228] Exhibit A1, page 28
[229] Exhibit A5, pages 549, 551

Deceit is a false representation made by a person knowing the representation to be false, or reckless as to its truth or falsity, with the intention that the person to whom the representation is made should act in reliance on the representation, and the person suffers damage as a result of their reliance on the representation.
While proof the plaintiff suffered loss as a result of the defendant’s dishonesty is an essential element of the cause of action, it is not necessary to show the defendant benefited personally.
In Cargill Australia Ltd v Viterra Malt Pty Ltd (No 28), Elliott J said:
Recklessness is a state of mind established by showing an “indifference to [the] truth or falsity” of the representation. It has alternatively been expressed as the absence of genuine or honest belief in the truth of the statement as it was intended to be understood. Recklessness requires the defendant to have been aware of a risk that the statement was untrue or false and to have consciously disregarded that risk. The second element may also be established where a defendant wilfully shuts her or his eyes to what would result from further enquiry as to the truth or falsity of the statement.[230] [Footnotes omitted]
[230] [2022] VSC 13 at [3229]
In Magill v Magill, Gleeson CJ said:
The tort of deceit provides a legal remedy for harm suffered in consequence of dishonesty, but, as Viscount Haldane explained in Nocton v Lord Ashburton, the concept of ‘fraud’ is wider in some legal contexts than in others. He said:
“Derry v Peek simply illustrates the principle that honesty in the stricter sense is by our law a duty of universal obligation. This obligation exists independently of contract or of special obligation. If a man intervenes in the affairs of another he must do so honestly, whatever be the character of that intervention. If he does so fraudulently and through that fraud damage arises, he is liable to make good the damage. A common form of dishonesty is a false representation fraudulently made, and it was laid down that it was fraudulently made if the defendant made it knowing it to be false, or recklessly, neither knowing nor caring whether it was false or true. That is fraud in the strict sense.”[231] [Footnotes omitted]
[231] [2006] HCA 51 at [17]
In the same case, Gummow, Kirby and Crennan JJ said:
The modern tort of deceit will be established where a plaintiff can show five elements: first, that the defendant made a false representation; secondly, that the defendant made the representation with the knowledge that it was false, or that the defendant was reckless or careless as to whether the representation was false or not; thirdly, that the defendant made the representation with the intention that it be relied upon by the plaintiff; fourthly, that the plaintiff acted in reliance on the false representation; and fifthly, that the plaintiff suffered damage which was caused by reliance on the false representation. Generally, the elements of the tort have been found to exist in cases which concern pecuniary loss flowing from a false inducement and the need to satisfy each element has always been strictly enforced, because fraud is such a serious allegation.[232]
[232] [2006] HCA 51 at [114]
In Wood v Balfour, McFarlan JA referred to the summary in Magill and said:
If a plaintiff establishes these elements it will have demonstrated that the defendant acted dishonestly. The fact that a finding that a defendant is liable in deceit involves a conclusion that the defendant has acted dishonestly has been emphasised in many cases …[233]

Consideration

The claim in respect to the first water bill
[233] [2011] NSWCA 382 at [59] (Giles and Meagher JJA agreeing)

The first water bill for the quarter commencing 8 February 2018, included a past due amount of $1,561.84 for an earlier unpaid bill for which the tenants could not be liable because their tenancy commenced on 1 February 2018. Mr He knew this. By sending the bill to Mr Xu and asking him to pay two-thirds of the full amount due, Mr He represented to the tenants they were responsible to pay not only the current charges but also the past due amount. The representation was false.
Later, when Mr Xu enquired whether the tenants were liable only for current charges, he was entitled to expect Mr He would answer honestly, after making appropriate enquiries to the lessor if necessary. The evidence shows Mr He refused to provide the tenants with a full copy of the bill and, when pressed, claimed the lessor did not give him a full copy. This was true only in the sense that the screenshot the lessor sent Mr He omitted details of current charges, although it was obvious that water consumption charges were for the period from 8 February to 8 May 2018. Mr He could have asked the lessor for a full copy of the bill but evidently did not do so. Mr Xu apparently did not pursue the matter further and Mr He did nothing to disabuse him of the false impression that the tenants were liable to pay their share of the past due amount as well as current charges.
I have found the lessor “incentivised” Mr He not to question water bills she gave him with promises she would give him more properties to manage. Giving Mr He the benefit of the doubt, it could be said he was reckless in complying with the lessor’s instructions to get the tenants to pay the full amount due in the invoice – in the sense that he was indifferent whether or not the tenants were liable to pay a past due amount relating to a period predating the commencement of their tenancy. However, after Mr He’s attention was drawn specifically to the issue whether the tenants were responsible to pay the past due amount, I am satisfied Mr He knew they were not.
In the final analysis, whether he was reckless or had actual knowledge of the falsity of the representation, the result is the same. His actions were dishonest. Mr He intended the tenants should believe they were responsible to pay for ‘their share’ of the full amount due, including the past due amount. The tenants did so, evidenced by the fact they paid $1,302 on 28 May 2018, which included $1,041.23 as their share of the past due amount of $1,561.84. This amount constitutes their loss.
The evidence shows the lessor received payment in full for the first water bill. Although Mr He did not benefit directly, he did so indirectly. By doing the lessor’s bidding, Mr He was rewarded by being given up to thirty properties to manage, before relations began to sour in August 2018.
The tenants have established Mr He is liable in damages for deceit in respect to the first water bill. Damages are quantified at $1,041.23 plus interest of $272.53 from 28 May 2018 to the present date.
The claims in respect to subsequent water bills
The second and third water bills were fakes Mr He created and passed off as genuine, intending the tenants to pay their two-thirds “share”, which they did. He did so for personal gain. They paid $1,298 on 22 November 2018 for the second water bill and $2,274.54 on 5 July 2019 for the third water bill, in both cases in the belief the bills were genuine.
The fourth water bill also was a fake Mr He created and attempted to pass off as genuine. The tenants’ two-thirds share would have been $2,475.21. When Mr Xu disputed the authenticity of the bill, Mr He first attempted to reassure Mr Xu that discrepancies in the account numbers in this and earlier bills were because “the landlord is not the same” and he refused to disclose the lessor’s name, claiming this was because of Australia’s privacy laws, none of which was true. Later the same day, when Mr He “negotiated” payment of $1,645 as the tenants’ contribution to the bill, it was implicit that this represented an amount for which they were genuinely liable. This also was false. Although there is no direct evidence of what Mr He said to Han Gao to justify the figure of $1,645 – there is some hearsay evidence from Ms Chen about this mentioned in paragraph 175 above – one may infer from the fact of payment that the tenants were induced to believe they were liable for the amount Mr He insisted they pay.

A new cause of action for deceit accrued on the date of each payment, as did Mr He’s liability to pay damages. At the commencement of the hearing the tenants said they were prepared to accept responsibility for their share of water consumption charges although the lessor had no lawful entitlement to charge for water usage because the premises were not separately metered. This is a private arrangement between the tenants and the lessor, which was not made for Mr He’s benefit. It has no bearing on the damage the tenants suffered by Mr He’s dishonesty or on his liability to pay damages.
The tenants have established Mr He is liable in damages for deceit in respect to the second, third and fourth water bills. Damages are quantified as follows:
(a)$1,298 for the second water bill plus interest of $301.85 from 22 November 2018 to the present date;
(b)$2,274.54 for the third water bill plus interest of $457.03 from 5 July 2019 to the present date; and
(c)$1,645 for the fourth water bill plus interest of $296.71 from 25 November 2019 to the present date.
The claim in respect to the unauthorised bond and rent charges
I have found Mr He asked Mr Xu to pay an extra $400 towards the bond in late November 2018 on the basis the lessor instructed him to increase the rent by $100 per week, and that he charged Mr Xu an extra $400 rent for February 2019 on the same basis, when the lessor gave no such instructions. Mr Xu paid those amounts on 28 November 2018 and 29 January 2019 in the belief, induced by Mr He’s representations, that the lessor had decided to increase the rent by $100 per week from the beginning of February 2019, which was untrue. Mr He kept the money for himself.
The tenants have established Mr He is liable for damages in deceit in respect to these payments. Damages are assessed at:
(a)$400 plus interest of $93.56 from 28 November 2018 to the present date;
(b)$400 plus interest of $89.80 from 29 January 2019 to the present date.
The claim in respect to cleaning costs
The terms of the agreement made between Mr He and Mr Xu on 12 January 2020 included that, in consideration of payment of $1,200, Mr He would arrange to do the end-of-lease cleaning of the premises, remove any rubbish left behind and do the necessary garden maintenance. He did some cleaning, but I am satisfied it was not a thorough job and needed to be redone. He made no attempt to do the garden maintenance. He lied when he told the lessor on 1 February 2020 that the tenants hoped the cost of weeding the garden could be deducted from the bond. He did not remove rubbish and furniture the tenants left behind.
I have not accepted Mr He’s evidence he was prevented from completing the agreement because the tenants did not leave him a key. I am satisfied Mr He did not fulfill the term of the agreement and that this resulted in $1,800 being deducted from the bond on 6 March 2020.
The tenants have established that Mr He is liable in damages for breach of contract. Damages are assessed at $1,800.00 plus interest of $299.15 from 6 March 2020 to the present date.

Disposition

Mr He must pay $8,570.25 as damages for deceit. He must also pay $2,099.15 as damages for breach of contract. Both amounts include interest to the present date. As the tenants have been successful, an order under section 48(2)(a)(i) of the ACT Civil and Administrative Tribunal Act 2008 requiring Mr He to pay the ACAT filing fee of $162 is appropriate.
………………………………..
Senior Member M Orlov

Date(s) of hearing	16, 17, 25 and 28 November 2022
Applicants:	Jieshan Chen (in person), Jiahao Xu (via video link)
Respondent:	Hongguang He (in person)