Separation can signal the emotional and practical end of a marriage, even if the finality of divorce has not yet been reached. During this interlude, people may begin new relationships and even contemplate remarriage. However, this raises an important legal and financial question: can you purchase an engagement ring for your new partner after separation without it impacting your property settlement with your former spouse?
Australian family law generally affords parties the freedom to manage their financial affairs post-separation. However, that freedom is not absolute. The court retains discretion to examine transactions made after separation, particularly where such expenditures dimmish the asset pool available for division between parties. This discretion was exercised in the case of NHC & RCH [2004] FamCA 633 (9 July 2004) which tested the boundaries of post-separation engagements.
In this case, following the parties’ separation, but before the divorce, the husband entered a new relationship. During this time, he purchased an engagement ring valued at $28,000 for his new partner, Ms H. The ring later became a contested item in the property settlement between the former spouses. At first glance, it might seem intuitive that a gift given after separation should fall outside the scope of matrimonial property. Yet, the trial judge took a different approach.
At first instance, the Family Court added back the $28,000 to the husband’s side of the asset pool. The rationale was that the ring was considered a premature distribution of marital assets: an expenditure that potentially diminished the resources available for equitable division. This principle of “add-backs” allows the court to notionally include property that has been dissipated or disposed of inappropriately by one party after separation. In this case, the judge treated the engagement ring as such dissipation.
The husband appealed the decision, and the Full Court overturned the trial judge’s ruling. The appellate court emphasised three critical considerations:
- Timing of the purchase: The engagement ring was purchased 8 months after separation, at a time when the marriage had effectively ended.
- Source of funds: The ring was not purchased using joint matrimonial assets. It was acquired on a credit card, and Ms H later repaid some or all of the cost.
- No tangible impact on the marital pool: There was no evidence that the ring’s purchase had depleted the asset pool or conferred an unfair advantage on the husband.
The Court distinguished this case from In the Marriage of Townsend, where unilateral use of joint funds by one spouse was treated as a legitimate add-back.
So, can you buy your new partner an engagement ring post-separation? In short, yes – but with conditions.
If the ring is purchased after separation, using post separation income or credit and does not reduce the shared asset pool, then it is unlikely to be subject to division or add-back. However, if the ring is funded using joint marital assets, or if it affects the net asset pool available for property division, then it could be scrutinised or notionally added back.
Before making large expenditures during a separation period, particularly if litigation is ongoing or a settlement is pending, it is encouraged to obtain legal advice. What feels like moving on can, in some cases, be considered as prematurely moving assets unless done correctly.
Written by
Giorgia Wilson
Family Law Solicitor
It is also important to speak to a family lawyer first. We have experienced solicitors in Newcastle and the Central Coast area that can help you through your family law matter.
We offer a fixed fee initial consultation from $330. Simply Contact one of our friendly staff members to make an appointment.
