The trial judge concluded that there was no ambiguity
in the language of the exclusionary clause. Since the damage
was caused by waves it was excluded from coverage. The Court
of Appeal agreed that there was no ambiguity, but came to the
opposite conclusion, deciding that the damage was not caused
by a flood as defined. In reaching its conclusion, the Court
of Appeal interpreted the words “. . . and the rising of, the
breaking out or the overflow of, any body of water . . .”, stating
(at paras. 9 and 10):
Properly construed, in my opinion, what the draftsman of the clause has
done is to provide that flood is to be interpreted as covering both cause and
effect. Thus, the flood may be caused by waves, tides, tidal waves, and if, for
example, as in this case, waves result in the rising of, the breaking out, or
the overflow of a body of water that would amount to a flood within the
meaning of that term as defined in the exclusionary clause.
. . . it is clear that what occurred . . . was that waves battered the plaintiff’s
ferry terminal causing damage, but those waves did not result in the rising
of, the breaking out, or the overflow of any body of water. As a result, I conclude that there was no flood within the meaning of the exclusionary clause
in the policy. Therefore, the damage suffered by the plaintiff fell within the
coverage of the all risks policy.
 I make two observations with respect to this decision.
First, it strikes me that if two judges disagree over the interpretation of the same clause there must be at least some ambiguity
in the language. Second, I would have thought that a six-foot
wave on the Pacific Ocean does qualify as the “rising of . . . a
body of water”.
 Either way, the holding in B.C. Ferry does not directly
address the issue in this case. Gore argues that the case stands
for the proposition that the loss at issue “did not involve any
body of water”. That is not correct. There was no question in
that case that the loss involved a body of water: the waves
came from the Pacific Ocean, and no one disputed that the
Pacific Ocean is a body of water. The issue, according to the
Court of Appeal, was whether the waves resulted in the rising
of, the breaking out, or the overflow of any body of water.
The British Columbia Court of Appeal found that it did not.
In any event, the case did not consider whether a “body of
water” must be pre-existing, permanent and identifiable
(although there is no doubt that the Pacific Ocean meets all of
 In my opinion, the ordinary meaning of the phrase
“the rising of, the breaking out or the overflow of any body of
water whether natural or man-made and includes waves, tides,
tidal waves, and tsunami” is limited to pre-existing bodies of
water and does not include pooling of rain water in a location