Tom is an employee of AJD Buildings Pty Ltd ('AJD'). Tom's employment contract with AJD contains a non-compete clause, which states that in the unfortunate event that he ceases employment with AJD he must not solicit AJD's clients for 3 years. This clause extends to submitting tenders for projects managed by AJD's clients. Tom resigns from AJD after a bitter fallout with his colleagues. Tom sets up a new building company, Houses Galore Pty Ltd ('Houses Galore'), with his wife, Jenny, and friend, Susan. Houses Galore was duly registered as a private company under the Corporations Act 2001 (Cth), with Jenny and Susan as the directors and shareholders. They all agreed that Tom would not be an office holder or employee of the company to avoid breaching his agreement with AJD, but that Tom would help Jenny draft the tenders for Houses Galore. If they successfully won the contracts from AJD's clients, Jenny would be rewarded with a bonus of 20% of the contract price. Tom used AJD's precedents when drafting Houses Galore's tender proposals for projects operated by AJD's clients. However, Tom always made sure that all tenders were submitted on Houses Galore's letterhead and that his name was never on the documents. Tom and Jenny also regularly met up for drinks with AJD's clients, many of whom Tom had a great friendship with, and recommended that they use Houses Galore. Several of AJD's clients started using Houses Galore for their building projects and were very happy with Houses Galore's services. So much so, several of AJD's clients provided very positive testimonies on Houses Galore's Facebook page. One testimonial included the following quote: "I highly recommend using Houses Galore for your next building project. The job is always completed on time and for a great price. The boss Tom knows his stuff and has a great team." After many months of successful business, Houses Galore purchased a commercial property outright to run their business from, being 1 Smith Street, Brighton QLD 4222 ('Brighton Property'). However, Susan was growing tired of taking directions from Tom and found him unbearable to work with. Accordingly, she went to WestBank and obtained a personal loan in her name so she could fund a 12-month holiday around the world with her husband Barry. To secure the loan, Susan informed the WestBank manager that Houses Galore had agreed to provide a corporate guarantee limited to the amount of the loan and a first registered mortgage over the Brighton Property. WestBank's loan and mortgage documents specifically included a "presigning checklist" which included acknowledgements that the documents were being executed in accordance with section 127 of the Corporations Act 2001 (Cth) and that all internal company procedures had been complied with, where relevant. Susan and Barry signed the corporate guarantee and mortgage on behalf of Houses Galore, both stating that they were directors of Houses Galore. Unbeknownst to WestBank at the time of providing the loan, Barry was not a director of Houses Galore. Houses Galore's constitution also required board approval prior to any loan/mortgage 7 documents being executed on behalf of the company, which had not occurred prior to Susan and Barry signing WestBank's documents. Susan and Barry left the next day for their 12-month holiday and Susan immediately defaulted on the loan repayments to WestBank. Jenny only became aware of the loan, guarantee and mortgage when WestBank served a guarantor's demand for Jenny's full loan amount on Houses Galore. The notice included a statement that should Houses Galore fail to repay Jenny's debt in full within seven days, WestBank would commence proceedings to take possession of the Brighton Property.

Question 3 - Advise AJD if they can get an injunction against Houses Galore to prevent Houses Galore from soliciting AJD's clients and submitting tenders for projects operated by AJD's clients? Clearly outline your reasons for your answer.

Question 4 - Advise Jenny if Houses Galore will be bound by the corporate guarantee and mortgage?