The Yukon's top court has rejected North 60 Petro's argument that it couldn't be found liable for a 1999 airport hangar fire that saw the company handed a $14-million bill after the longest civil trial on record in the territory.

In a unanimous decision handed down this morning, the Yukon Court of Appeal also declined to change most of the trial judge's decisions on what Trans North Turbo Air and its tenants should be awarded, though the three-judge panel did alter pre-judgment interest and trial costs in favour of North 60.

The multimillion-dollar case began after Trans North lost its helicopter charter business' base of Hangar C at the airport in a fire on Jan. 18, 1999.

After a three-month trial in the summer of 2002, Justice Ron Veale ruled last spring that North 60 and the two employees who used a welding torch to remove a company sign from the hangar's roof were responsible for the blaze.

North 60 had previously been a tenant in the hangar.

Veale ordered that North 60 pay more than $14 million for Trans North's hangar and loss of business, as well as the building's contents, owned by Trans North, operations manager Bob Cameron and two aircraft operations leasing space.

At the appeal hearing in Vancouver in May, North 60's lawyers didn't dispute that employees Patrick O'Hagan and Brian Larkin were negligent in how they went about using an oxyacetylene torch to cut nuts off two bolts 5 1/2 hours before the roof was clearly on fire.

However, they argued that in determining North 60 and its employees were liable for the loss, Veale speculated beyond any proper inference that could be drawn from the evidence.

At trial, North 60 had argued that the fire's cause was either unknown as the Whitehorse Fire Department ruled or that it could have started due to electrical problems.

Trans North, on the other hand, presented the theory at trial that there was opportunity for the shower of sparks and slag at 2,500 to 3,000 degrees Fahrenheit to ignite the donnaconna and fir board of the roof's southeast corner through gaps or cracks in the petroleum-based cover.

Veale had said in his ruling finding North 60 liable that though the fire's cause couldn't be determined with scientific certainty, it was open to him to lay the blame at the feet of the two torch-wielding men and their employer.

The pair hadn't followed codified safety precautions when they removed the sign.

At trial, Trans North presented a surveillance video recorded from a camera on the airport terminal across the airfield from the hangar. Veale ruled that intermittent luminous flashes starting about 3 1/2 hours after the two North 60 employees left the hangar's roof until the blaze stared in earnest pinpointed the fire's location to where the North 60 sign was. The fuel company didn't challenge that ruling.

What North 60 challenged was that there was no evidence to support the judge's finding that the hot slag and sparks could have found their way into the donnaconna and fir board.

Writing for the appeal court, Justice P.D. Lowry notes that any frailty in Trans North's theory of how the fire started 'is of little consequence.'

Because the luminous flashes are evident two hours before any other indication of fire is recorded, 'no reasonable alternative origin of the fire can be suggested,' wrote Lowry. 'The only logical inference to be drawn is that, by some means, the use of the torch ignited the roof that was made of combustible material. This is not a matter of speculation. It is an inescapable conclusion.'

Inference is made from facts, noted Lowry, while speculation or conjecture happens when there are no positive, proved facts.

This isn't a case where there are no positive facts inferring the donnaconna board could have caught fire, the judge wrote.

He noted that two Trans North maintenance employees had testified they'd seen cracks in the roofing material some months before.

North 60's electrical fire expert testified that certain electrical anomalies associated with the fire meant that an electrical fire had to be considered as one of several potential causes.

'The fact that the roof was recorded by video surveillance to be burning for two hours before there was any other indication of a fire puts an alternative cause beyond serious contention,' Lowry wrote. 'That fact is inconsistent with the fire having originated anywhere else or having been caused by other than the negligent use of the torch.'

The appellate court declined to touch Veale's decisions regarding the financial figure attached to the loss of Hangar C, lost parts and accessories, business interruption loss, increased insurance premiums and pre-judgment interest.

However, the three judges granted North 60 its request for changes to court costs, determining that Veale erred in his interpretation of changed court rules surrounding the calculation of costs.