Company Law Case Study: Computers Pty Ltd.

Now we turn to discuss the case study. I hope everyone have already done it. The main issue of the case study is that Chu has been the New South Wales (NSW) Operations Manager for Computers Pty Ltd. Due to Chu’s senior position knows the identity and requirements of the company's major clients. In March 2007, Chu decides to retire and agrees to not compete against the company in NSW for two years. However in April 2007, Systems Pty Ltd actively solicits business from the customers of Computers Pty Ltd in NSW and Chu’s wife is the sole director for Systems Pty Ltd. After 1 July 2007 Computers Pty Ltd reorganized their company and now called Software Pty Ltd. The problem is whether the Computers Pty Ltd can seek a court injunction to prevent Systems Pty Ltd from soliciting its customers. Now please discuss this issue with the people around you for the few minutes. Then we talk about that.

For this question, who think the Computers Pty Ltd need seek a court injunction to prevent Systems? And who think not? ….

Our group research that few relevant cases and try to find the answer on this problem. The first one is Gilford Motor Company Limited v Horne [1933] CH935. This case is very similar to the case of Computer and Chu. In the case of Gilford Motor Company and Horne, Horne was a managing director of the Gilford Motor Co Ltd. His employment contract stipulated (clause 9) not to solicit customers of the company if he were to leave employment of Gilford Motor Co. Mr. Horne was fired, thereafter he set up his own business and undercut Gilford Motor Co's prices. He received legal advice saying that he was probably acting in breach of contract. So he set up a company, JM Horne & Co Ltd, in which his wife and a friend called Mr Howard were the sole shareholders and directors. The High Court held that Mr Horne would not break the covenant with Gilford Motor Company. Therefore, in the case of Gilford Motor Company Limited v Horne [1933] CH935, the defendants company was