Insurers’ claim to set-off brokers’ debts against proceeds of marine insurance policy

Plaintiff shipowners effected a policy of marine insurance on their vessel, through insurance brokers, with the defendant insurers. The policy provided that all claims should be “collected through” the brokers. A loss occurred by an insured peril. After the loss, but before the settlement of the claim, the brokers went into liquidation, owing the insurers substantial sums of money. The plaintiffs sought payment of the claim through new insurance brokers, and applied for summary judgment under R.S.C., O.14. The insurers contended that they were entitled to set off the claim in account with the original brokers. Evidence was filed of a course of dealings between the original brokers and the insurers whereby claims and premiums were set off in account. However it did not appear that the original brokers had ever sought to bring the plaintiffs’ claim into the account.