by :  Ashley Lovelock

A recent case in the media reported a builder demanding that his fiancée return a two-carat diamond ring, together with other jewellery that he said was worth more than $100,000.

He said that the ring and other jewellery was bought for his fiancée on the implied condition that they were to be kept safely and to be returned on demand if they did not marry.

His fiancée said that he was unfaithful during their relationship and repeatedly subjected her to abuse, based on which she had no legal obligation to return the ring, nor the other jewellery.

The case is presently before the County Court of Victoria where a Judge will be required to decide who keeps the ring and the other jewellery.  [1]

English Courts have ruled that engagement rings are“conditional gifts”, meaning that it depends on the wedding occurring. They have been likened to a ‘transactional contract’, so if the event doesn’t occur then the gift giver has the right to get the gift back – which is not a very romantic notion.

In Australia, the NSW Supreme Court in a case of case ofPapathanasopoulos v Vacopoulos[2007] NSWSC 502, the parties were engaged and 10 days later Ms Papathanasopulous called off their engagement. Mr Vacopoulosinitially told Ms Papathanasopulousthat she could keep the ring as a gift. However, when Ms Papathanasopulous informed him that she intended to dispose of the ring and to “toss the ring into the garbage bin,” he then commenced proceedings for the return of the ring or to be compensated for its value of $15,000.00. The Local Court found in Mr Vacopoulos favor and ordered that the ring be returned, or that Ms Papathanasopulous compensate Mr Vacopoulos for the value of the ring. Ms Papathanasopulousappealed that decision in the Supreme Court on the basis that the ring was a gift and she was entitled to keep the ring.

The Supreme Court ummarised that the following principles apply to engagement rings:

  1. If a woman who has received a ring in contemplation of marriage refuses to fulfill the conditions of the gift she must return the ring;
  2. If a man refuses to carry out his promise of marriage, without legal justification, he cannot demand the return of the ring such as “there may be repudiatory conduct on   the man’s part, for example “acts of violence towards the woman or having a sexualrelationship with another woman, in such circumstances, the woman can probablykeep the ring
  3. It matters not in law if the repudiation of the promise turns out to benefit both parties;
  4. If the engagement is called off mutually by both parties, then in the absence of any agreement the engagement ring and similar gifts must be returned by each party to the other.

The reasons for calling off the engagement are relevant. The approach is fault-based, which is inconsistent with the Family Law Act (Cth) (1975).

It is important to remember that if parties are married or in a de facto relationship, the above principles will not apply as the matter will fall under the Family Law Act 1975 (Cth). As with any item of significant value, jewellery is to be disclosed under the Rules and can form part of the asset pool when finalising your property adjustment.

It is important to get experienced and well informed legal advice before making decisions on the breakdown of a relationship, to avoid expensive and lengthy disputes.