Since the foundation wall projects above the surface of the
ground, the fact that the water came in through the foundation
wall does not mean that it came in below the surface of the
ground. Smrke’s report does not explain how water that came in
below the surface of the ground made its way up to the above-grade flooring that was damaged. It appears to me that Smrke’s
report incorrectly conflates “through a joint in the foundation
wall” with “below the surface of the ground”. In this case, the
joint in the foundation wall was above the surface of the ground.
Accordingly, based on the evidence that I have reviewed, I conclude that the water that entered the premises through the
foundation entered above grade and was not “water below the
surface of the ground”.
 With that factual finding in hand, I can proceed with an
analysis of the terms of the insurance contract.
Principles of Interpretation
 The general principles of interpretation that apply to
insurance policies are well established. I adopt this summary of
those principles from the Ontario Court of Appeal’s decision in
Cabell v. Personal Insurance Co. (2011), 104 O.R. (3d) 709, 
O.J. No. 622, 2011 ONCA 105, at paras. 11-13:
A clause in the policy providing coverage will be broadly interpreted in
favour of the insured. An exclusion clause limiting coverage will be strictly
interpreted. Since insurance contracts are contracts of adhesion, any ambi-
guity in the policy will be construed against the insurer, applying the contra
proferentem doctrine: Reid Crowther & Partners Ltd. v. Simcoe & Erie
General Insurance Co., [1993 CanLII 150 (SCC),  1 S.C.R. 252, 
S.C.J. No. 10, at pp. 268-69 S.C.R.]; Consolidated Bathurst Export Ltd. v.
Mutual Boiler and Machinery Insurance Co., [1979 CanLII 10 (SCC), 
1 S.C.R. 888,  S.C.J. No. 133]. However, these principles of interpreta-
tion cannot create ambiguities; if the exclusion clause is clear, it is to be
applied according to its terms, subject to the nullification of coverage doc-
trine discussed below.
 As to interpretation of endorsements generally speaking
the endorsement does not operate independently of the policy.
As Lang J.A. put it in Pilot Insurance Co. v. Sutherland (2007),
86 O.R. (3d) 789,  O.J. No. 2596, 2007 ONCA 492, at
An endorsement changes or varies or amends the underlying policy. While it
may be comprehensive on the subject of the particular coverage provided in
the endorsement, it is built on the foundation of the policy and does not have
an independent existence.