If couples separate before they are married the Family Law Act does not apply to them as they are not yet spouses. Because of this there is no legislation which covers who gets the engagement ring if they separate before the wedding.
The common law would apply in this situation and you would need to look to contractual obligations. What was the nature of the contract and who breached it?
One approach is that an engagement ring could be seen as a gift subject to an obligation to marry. It follows that the person who calls off the wedding (i.e. who breached the contract) would give the ring to the other party unless that party caused the breakup by being physically or mentally abusive.
Another approach is to say that the ring was given in contemplation of an event that now will never occur and each party should return their gifts to the other because the “contract” is void.
A third approach would be to say a gift is a gift and conditions cannot be attached to a gift.
All of these approaches have been litigated and unfortunately there is no clear authority regarding which approach a court would take. Depending on the value of the ring, possession may prove to be 9/10 of the law because it may not worth litigating the issue.
For more information contact Deborah Todd Law
