Menelaou v Bank of Cyprus UK Ltd

This appeal is concerned with the law of unjust enrichment and subrogation. Melissa Menelaou's parents, who were heavily indebted to the Bank of Cyprus UK Ltd, sold their home and intended to use the proceeds to buy a smaller property for the family. Melissa's father informed the solicitors that Melissa would buy the new property, which would be held on trust for Melissa and her two younger siblings. The Bank agreed to release its charges on the old property if it received £750,000 and was given a charge on the new property. The solicitors made a mistake, resulting in the charge on the new property being in Melissa's name and not her parents'. The Bank released its charges on the old property, and completion took place. The Bank later claimed that it was subrogated to an unpaid vendor's lien over the new property. Melissa argued that she had not been unjustly enriched and that the Bank could not be subrogated to the unpaid vendor's lien. The Supreme Court held that Melissa was enriched at the expense of the Bank, that the enrichment was unjust and that the Bank could be subrogated to the unpaid vendor's lien. Melissa's appeal was dismissed. The court found that Melissa was enriched when she became the owner of the new property, and that the Bank was entitled to succeed if it had received all the proceeds of the sale of the old property and then re-advanced the money required for the purchase of the new property. The court rejected the argument that there must be a direct payment by the Bank to Melissa, holding that whether a particular enrichment is at the expense of the claimant depends upon the facts of the case and whether there is a sufficient causal connection between the loss to the Bank and the benefit received by Melissa. The court found that the Bank was subrogated to the unpaid vendor's lien over the new property, which was an equitable interest that the Bank could enforce by sale. The court held that the remedy of subrogation reversed Melissa's unjust enrichment by ensuring that the Bank had a personal claim against her and an equitable interest in the new property.