A finite volume algorithm was established in order to investigate two-dimensional hydrodynamic problems. These include viscous free surface flow interaction with free rigid bodies in the case of large and/or relative motions. Two-phase flow with complex deformations at the interface was simulated using a fractional step-volume of fluid algorithm. In addition, body motions were captured by an overlapping mesh system. Here, flow variables are transferred using a simple fully implicit non-conservative interpolation scheme which maintains the second-order accuracy of implemented spatial discretisation. Code was developed and an appropriate set of problems investigated. Results show good potential for development of a virtual hydrodynamics laboratory.