TORONTO - Questions persisted Tuesday about how and why police first cleared Romeo Phillion of murder then later decided his alibi was false as Ontario's highest court grappled with whether a wrongful conviction occurred 36 years ago.

Throughout her closing arguments, Crown lawyer Lucy Cecchetto attempted to persuade the three justices of the Court of Appeal that nothing legally nefarious happened -- that Phillion's alibi simply proved not to hold water and the defence knew that.

Court records show Phillion's trial lawyer, Arthur Cogan, never broached the alibi subject at any time.

"The best evidence that he knew about the alibi is that he did not pursue it at all?" a skeptical Justice Michael Moldaver asked Cecchetto.

What is clear is that police, by their own reports, quickly concluded that Phillion had been out of town in August 1967 with car trouble when Ottawa firefighter Lepold Roy was stabbed to death.

On that basis, both the lead detective in the case and his superior wrote several months later that Phillion had a verified alibi and therefore could not have killed Roy.

However, at some point, Det. John McCombie decided the alibi was false. How he arrived at that conclusion remains murky and no evidence exists to explain why McCombie changed his mind.

The Crown's theory is that the police reports which initially cleared Phillion were based on second-hand information, and McCombie subsequently debunked the alibi after an investigation, though no records support that theory.

McCombie has testified his notes disappeared after he sent them to the Ottawa police evidence room. Cecchetto has said the room was managed by an alcoholic officer.

In her second day of closing arguments Tuesday, Cecchetto again ran into skeptical judges as she accused Phillion's legal team of calling McCombie a liar and creating "pure fiction" in their reconstruction of events.

Cogan must have known of the debunked alibi but simply chose to ignore it as he pursued other legal avenues, she insisted.

Cogan himself has expressed "shock" at learning 26 years later that police had in fact verified Phillion's story and insisted he knew nothing about it.

Cecchetto called Cogan's memory of the case "unreliable."

"He was told it was discounted," she said.

"It was just one of many alibis. The reason it was forgotten was because it was discounted."

Justice John Laskin said McCombie appeared to have been less than forthright when questioned by Cogan during Phillion's preliminary hearing about his actions around the alibi.

In testimony, McCombie said nothing about investigating Phillion's story and finding it to be wrong, evidence shows.

Under questioning by Cogan at the time, he testified that police hadn't dug up any new information or evidence between clearing Phillion and his arrest in 1972.

Phillion spent 31 years in jail for killing Roy before being released on bail while the courts puzzle out if he was wrongfully convicted in 1972 based solely on an immediately recanted confession made more than four years after the murder.

No physical evidence linked him to the crime.