The contractual agreement was between a young man and a young woman. The young woman's father is not returning the ring and is basically asking for money to cover his expenses. Is he allowed to do this when the ring does not belong to him?
The engagement ring is a gift to the bride, and keeping it is an unlawful conversion, and possibly theft under applicable criminal law.
This question is very odd, considering the laws here.
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Divorce / Separation Lawyer
The ring is the daughter's property. If the father refuses to return the ring it could be theft.
This advice is not meant to create an attorney-client relationship and is a general anwer to the question posed.
Family Law Attorney
The ring belongs to the not-to-be-bride unless she cancelled the engagement, then she should return it to the not-to-be-groom as the gift was on condition that she marry him. As long as everyone is an adult, then none of the parents of the couple have grounds to take property from either person for the cancelled wedding.
If he is looking to get back the funds he spent on the "gift" of the cancelled wedding, then he should consider cancelling his daughter's Christmas from him.
This answer is being provided as general advice only and is not to be relied upon for specific circumstances. By answering the question, no attorney-client relationship is created. As for any matter, it is best to seek consultation in person with an attorney who practices in the area of law in which you are inquiring.