Esson and Esson (Child support)

This matter concerned a review by the Administrative Appeals Tribunal (AAT) of a decision regarding child support payable between Mr. Esson (the father) and Ms. Esson (the mother). The dispute arose from an application to depart from the standard administrative assessment of child support, with the mother seeking a review of a decision that had increased the father's adjusted taxable income for child support purposes. The tribunal was required to determine whether a ground existed for departure from the administrative assessment and, if so, whether making a particular determination would be just, equitable, and otherwise proper.

The primary legal issue was whether the father's actual income and financial resources were not accurately reflected in the child support assessment, thereby creating an unjust and inequitable situation. This involved scrutinising the father's various income streams, including his employment, private practice, and business activities, and comparing them to his declared taxable income. The tribunal also considered the parties' financial circumstances, including their assets, liabilities, and expenditures, as well as a pre-existing financial agreement concerning the children's private education costs.

The tribunal found that the father's income tax returns did not accurately reflect his financial position, particularly due to his failure to make full and frank disclosure of his income and financial resources. The tribunal calculated that the father's actual income and financial resources significantly exceeded his declared taxable income, suggesting he had a greater capacity to contribute to the children's support than the administrative assessment indicated. Despite the existence of a financial agreement regarding education costs, the tribunal concluded that the father's undisclosed income and financial resources meant that applying the standard administrative assessment would result in an unjust and inequitable determination of child support. The tribunal was persuaded by the mother's submissions that the father's child support liability should be set at nil, and given the terms of the financial agreement and the father's financial capacity, the mother's liability should also be set at nil.

Consequently, the tribunal set aside the previous decision and substituted an order that for the period from 31 July 2019 until a terminating event occurred in relation to one of the children, a nil annual rate of child support would be payable by both Mr. and Ms. Esson. This departure was deemed to be just, equitable, and otherwise proper, ensuring a more appropriate apportionment of financial responsibility between the parents. The tribunal also noted that setting a nil rate created an overpayment by the father, which he could repay without hardship.