When we look at the old colloquialism that the engagement ring should be worth about three months salary, you can’t help but wonder what happens to the ring if the wedding doesn’t go ahead.

Firstly, if the couple are found to be in a de facto relationship, the Family Law Act will apply. For the purpose of property settlement, a de facto relationship exists when the couple meet one of the following four gateway criteria:

  1. The duration of the relationship was at least two years;
  2. The couple have a child from their relationship;
  3. The relationship is or was registered; or
  4. A party has made significant contributions to the property or finances of their partner.

In circumstances where a de facto relationship exists, an engagement ring that holds greater than sentimental value would form part of the property pool. When considering how the property pool is distributed, the Court will take into consideration a number of factors including the length of the relationship, each parties’ financial and non-financial contributions, the future needs of each party, and whether the proposed division is just and equitable.

If the couple are not found to be in a de facto relationship, the Family Law Act would not apply, and the principles summarised in the matter of Papathanasopoulos v Vacopoulos (which dealt with an engagement ring worth $15,250) would guide the approach as follows:

  1. If a woman receives an engagement ring in contemplation of marriage and refuses to fulfil the conditions of the gift, she must return the ring;
  2. If a man refuses to carry out his promise of marriage, he cannot demand the return of the engagement ring; and
  3. If the parties mutually consent to the engagement ending, and there is no agreement otherwise, the engagement ring must be returned.

The outcome seems to turn on who breaks off the engagement, which is clearly inconsistent with the Family Law approach of “no fault divorce” that would apply if the couple were in a de facto relationship, or were to actually tie the knot but subsequently separate.