Case Study 4
For the past five years Chu has been the New South Wales Operations Manager of Computers Pty Ltd, a company which retails computer software and hardware. Because of his senior position, Chu knows the identity and requirements of the company's major clients.
In March 2014 Chu, at age 50, decides to retire. As part of his employment contract with Computers Pty Ltd, Chu had agreed that he will not compete against the company in New South Wales for 12 months.
In April 2014 Systems Pty Ltd was incorporated for the purposes of engaging in the retail business of selling computer software and hardware. Chu's wife holds all the issued capital in Systems Pty Ltd and is the only director. This new company actively solicits business from the customers of Computers Pty Ltd in New South Wales.
After Chu left Computers Pty Ltd in March, the company reorganised its business so that its software business was, from 1 July 2014, carried on by its wholly owned subsidiary called Software Pty Ltd. Software Pty Ltd and Computers Pty Ltd have the same directors and management. Software Pty Ltd now operates the retail software and hardware division previously operated by Computers Pty Ltd.
Advise Computers Pty Ltd as to whether the company can seek a court injunction to prevent Systems Pty Ltd from soliciting its customers.