Wellington, July 10 NZPA - Westpac Bank has failed to persuade the Supreme Court to reverse a decision in lower courts which cleared a solicitor of liability in a mortgage fraud which cost the bank $180,000.

The Supreme Court on Friday dismissed an appeal by Westpac and ordered it to pay solicitor Alan John Clark $15,000 costs, plus "reasonable disbursements".

Associate Judge Anthony Christiansen, in the High Court, rejected a Westpac bid for summary judgment against Mr Clark.

His decision was upheld by the Appeal Court, and Westpac took its case to the Supreme Court, where it also lost.

The bank was caught out by a "clever imposter" who impersonated Marie Antoinette Fenech, and used a false passport to obtain a $180,400 mortgage on her Remuera house. The same conwoman apparently used similar tactics at three other banks and three other lawyers.

Mr Clark provided a solicitor's certificate to Westpac on September 30, 2005, undertaking to promptly lodge the mortgage for registration, and Westpac handed over the money to the imposter on October 4.

Mr Clark took no steps to register the mortgage until December 6 -- but Westpac had known since November 18 that a fraud had been perpetrated, and registration of the mortgage was refused.

Chief Justice Sian Elias said the bank was effectively claiming that it was entitled to have Mr Clark register a forgery and that it has been deprived of that benefit: "I doubt whether that can be right," she said.

"The bank's claim against the solicitor is for failure to put it in a protected position through registration of a forged mortgage."

A registered mortgage would have allowed it to recover money from the legitimate home-owner -- even though they had not borrowed money -- and the home owner would have had to have sought compensation under the Land Transfer Act for the"mistake" of a registrar in accepting the forgery.

But the chief justice said the bank had failed to prove the claimed loss, even if the mortgage had been registered it would not have secured the money advanced separately under a forged loan document.

Justice Peter Blanchard noted that the Land Transfer Act does not allow banks to claim against the registry of land titles where a void mortgage has been innocently registered, but the Act and its compensation provisions are under review by the Law Commission.