The appellants' fishing vessel sank at its berth due to the ingress of sea water caused by corroded cap screws and a valve left open.
The marine insurance policy covered 'perils of the sea'.
The trial judge found the loss was fortuitous and covered, but the Court of Appeal reversed, holding the sinking was not a foreseeable consequence of the negligence.
The Supreme Court of Canada allowed the appeal, holding that a peril of the sea must be fortuitous and of the sea.
The loss was fortuitous because it was not intentional or inevitable, and the failure of the cap screws was due to negligent installation, not ordinary wear and tear or inherent vice.
The Court emphasized that foreseeability of loss is not a necessary condition for recovery under a marine insurance policy.
