We have all heard of the horror stories of the engagement ring getting flushed down the toilet, but what are your legal rights in the event the engagement is called off?
Engagement rings have been defined by the English courts to be conditional gifts meaning they are dependent on the event of the wedding occurring and have been likened to a transactional contract… how romantic!  Essentially, if the event doesn’t occur then the gift giver has the right to get the gift back.
The Marriage Act (1961) (Cth) abolished the right to recover damages but section 11A does indicate that there is still a right recovery of conditional gifts.
Australian Courts have said the following applies when the wedding is called off.
The leading authority is a NSW Supreme Court case: Papathanasopoulos v Vacopoulos  NSWSC 502. In this case, the parties were engaged and 10 days later Ms Papathanasopulous called off their engagement. Mr Vacopoulos originally told Ms Papathanasopulous she could keep the ring as a gift. However, when Ms Papathanasopulous informed him that she intended to dispose of the ring, he then commenced local court 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 Papathanasopulous then appealed the decision in the Supreme Court on the basis that the ring was a gift and she was entitled to keep the ring on that basis.
The Supreme Court then summarised that the following principles apply to engagement rings:
- 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;
- If a man refuses to carry out his promise of marriage, without legal justification, he cannot demand the return of the ring. The Court also defined a legal justification being violence or an affair;
- It matters not in law if the repudiation of the promise turns out to benefit both parties;
- 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.
Applying the above principles, it is apparent that the reasons for calling off the engagement are relevant. The approach is fault-based, which is inconsistent with the Family Law Act (Cth) (1975). The Family Law Act applies no-fault divorce – where the reasons for the divorce/separation are not considered in relation to most matters before the Court. 
It should be noted that the principles listed above may not apply if the parties are in a de-facto relationship and for instance living together on a genuine domestic basis prior to becoming engaged. In these cases, the engagement ring can form part of the asset pool in relation to a property/financial settlement in which case the Court considers a number of factors including the length of the relationship, the financial and non-financial contributions of the parties.
 Cohen v Sellar  1 KB 536 at 546.
 Family Law Act (Cth) (1975) s 48.
 Family Law Act (Cth) (1975 s 4AA.
 In the case of Marsden & Baker  FamCA 320.