When an engagement breaks down, questions often arise about each partner’s entitlements to property and how it should be divided. The engagement ring, in particular, can be a source of dispute due to its sentimental and financial value.
There is no single rule for determining who keeps the engagement ring when an engagement is called off. Courts make decisions on a case-by-case basis, considering the nature of the relationship and the intentions behind the gift.
Traditional Engagement
Relationships categorised as ‘traditional’ are those where the couple when becoming engaged have not lived together prior to the engagement.
For traditional engagements the Courts generally recognise that an engagement ring is a conditional gift, given in contemplation of marriage. If the relationship does not proceed to marriage, it is customary that the ring is returned to the giver.
However, case law has refined this principle and identified situations where the recipient may legally retain the ring. This could occur if they terminated the engagement on a ‘justified legal basis’, such as infidelity or violence. The concept of “justified legal basis” is not precisely defined, and the courts consider the circumstances of each case.
The main guidelines provided in Papathanasopoulos v Vavopoulus (the leading case law followed by the Family Courts) is as follows:
- If the recipient of the ring terminates the engagement, without a legal justification, they must return it.
- If the giver of the ring, terminates the engagement without a legal justification, they cannot demand the return of the ring.
- If the engagement is terminated by mutual agreement and there is no agreement as to the owner of the ring, it must be returned by each party to the other.
Marriage and De Facto partners
If you are separating from a marriage or a de facto relationship, and there is an engagement ring, the way the ring is treated is different from a traditional engagement.
A de facto relationship is one where you and your partner are not legally married but have a genuine domestic relationship together.
When these relationships breakdown, the ownership of the ring (in absence of an agreement) is usually treated as part of the property pool to be divided. The Court will look at:
- The current value of the engagement ring
- The total value of all property and assets
- How long the couple has been together
- The financial and non-financial contributions of each partner
- Each party’s individual current and future needs after separation
In most cases, the engagement ring is considered just another asset and sentimental value is not taken into account. An exception is if the ring is a family heirloom in which case the Courts often prefer the ring to be returned to the giver.
Additionally, it is important to note that the ring will not be valued based on its purchase price but rather its current value as a second-hand item. A professional valuer is usually required to determine the market value of the engagement ring.
Previous agreements to ownership
During the breakdown of a relationship, it is common for one party to tell the other that they can keep the engagement ring but later change their position in property settlement discussions. Courts take a case-by-case approach in these situations.
In Papathanasopoulos the court stated that Vavopoulus’ words “I do not want the ring you can keep it” were said in an effort to preserve the relationship and were not legally binding in determining ownership.
However, another case Loumbos v Ward the Court held the party accountable to his words expressed via email, allowing his partner to keep the engagement ring.
Unless ownership has been formally set out in a written agreement such as a financial agreement, the Court will consider the circumstances and nature of any agreement or consent conveyed.
Should neither party wish to retain the engagement ring, it may be sold and the proceeds of the sale would form part of the property pool.
Next Steps
As the method applied by the Courts is dependent on the nature of your relationship and certain rules of law are incomplete, it is best to contact a family lawyer to discuss your options.
Should you have the engagement ring in your possession it is best to store it in a safe and secure location. As the ownership is ambiguous it is best not to dispose of it as this may cause future issues in property settlement discussions.
If you need to speak with an experienced family lawyer, please contact Etheringtons Solicitors in North Sydney on (02) 9963 9800 or via our online contact form.