THIS AGREEMENT IS BETWEEN
Milk Chocolate Pty Ltd of Suite 7.03, 75 Mary Street, St Peters in the State of New South Wales (“Milk Chocolate”)
The party set out in Item 1 of the Schedule (“Client”)
(Collectively referred to as the “parties”)
Project Management services.
A. The Client is the registered proprietor of the Land and intends to proceed with construction works on the Land.
B. Milk Chocolate offers end-to-end project management services in relation to commercial and domestic renovations and construction work.
C. The Client has agreed to engage Milk Chocolate to administer the design, construction and completion of the Building Works on the Land as shown on the Plans and Specifications.
D. Both Milk Chocolate and the Client agree to the engagement pursuant to the terms and conditions of this Agreement.
1.1. Unless the context requires otherwise the following words and expressions shall have the meanings set out below:
(a) Agreement means this Project Management Agreement.
(b) Architect means the architect sourced by Milk Chocolate and ultimately engaged by the Client to carry out the design work necessary for the Building Works and to provide such advice as Milk Chocolate and the Client deems necessary for the effectual carrying out of the construction of the Building Works;
(c) Builder means the person sourced by Milk Chocolate and ultimately engaged by the Client to carry out the necessary construction works for completion of the Building Works and shall, where the context admits, include any nominated subcontractors of the Builder or Client;
(d) Building Works means the works to be performed on the Land pursuant to the Building Contract;
(e) Building Contract means the building contract to be entered into between the Builder and Client for the construction of the Building Works and as varied from time to time;
(f) Client means the Client or the Client’s representative set out in Item 1 of the Schedule or as appointed by the Client from time to time;
(g) Consultants means the Consultants sourced by Milk Chocolate and engaged by the Client as provided in clause 4.1 herein;
(h) Insolvency Event occurs in respect of a party if:
(i) Where the party is a company:
(A) the party is insolvent within the meaning of section 95A of the Corporations Act;
(B) a court is required by reason of section 459C(2) of the Corporations Act to presume that the party is insolvent;
(C) the party fails to comply with a statutory demand (within the meaning of section 459F(1) of the Corporations Act);
(D) an administrator is appointed over all or any of the party’s assets or undertaking or any step preliminary to the appointment of an administrator is taken;
(E) a controller within the meaning of section 9 of the Corporations Act or similar officer is appointed to all or any of the party’s assets or undertaking;
(F) an application or order is made, proceedings are commenced, a resolution is passed or proposed in a notice of meeting or an application to a court or other steps are taken (other than frivolous or vexatious applications, proceedings, notices or steps) for the party’s winding up or dissolution or for the party to enter an arrangement, compromise or composition with or assignment for the benefit of its creditors, a class of them or any of them; or
(G) the closest equivalent to subparagraphs (A) to (F) occurs in the jurisdiction of incorporation of the party.
(ii) Where the party is a natural person:
(A) an application has been made for his or her bankruptcy or he or she has filed for bankruptcy;
(B) a receiver, receiver and manager, trustee for creditors or trustee in bankruptcy or analogous person has been appointed to any of his or her property or assets or a creditor has taken possession of any of his or her property or assets;
(C) he or she has proposed or reached any voluntary arrangement with a creditor.
(i) Land means the Land set out at Item 2 of the Schedule;
(j) Plans and Specifications mean the designs, plans and specifications to be prepared by the Architect and specialist Consultants and forming part of the Building Contract and where the context so admits any variations thereto authorised by the owners and approved by the relevant authorities;
(k) Project Management Fees means the fees payable to Milk Chocolate by the Client in consideration of the performance by Milk Chocolate of the Project Management Services hereunder being the amount specified in Item 4 of the Schedule;
(l) Project Management Services means the services and duties of Milk Chocolate as set out in this Agreement;
(m) Headings have been inserted for guidance only and are not to be used to construe the meaning of any part of this Agreement;
(n) Website means www.milkchoc.com.au; and
(o) Words denoting the singular include the plural and vice versa, words denoting individuals or persons include bodies corporate and vice versa, reference to a document or Agreement includes reference to that document or Agreement as changed, novated or replaced from time to time, words denoting any gender include all genders.
2. Appointment of Milk Chocolate
2.1. The Client hereby engages Milk Chocolate to administer and control the design and manage and control the construction and completion of the Building Works and Milk Chocolate hereby accepts that appointment.
2.2. The Building Works shall proceed in the following stages:
(a) Stage 1 – Design, Planning and Building approval stage;
(b) Stage 2 – Contract stage;
(c) Stage 3 – Construction stage; and
(d) Stage 4 – Commissioning and maintenance stage.
3. Project Management Services
3.1. Without prejudice to other provisions of the Agreement, Milk Chocolate’s services and duties in general shall include the following:
(a) Assist in and ensure that all necessary approvals and consents required from all relevant authorities and adjoining owners are obtained so building approval may issue;
(b) Consult with the Architect, the Builder and Client on preparation of a list of tenderers, liaise with Consultants on their specifications, prepare necessary tender documentation and settle terms and conditions of the Building Contract;
(c) In conjunction with the Client, arrange for the calling of tenders, advise as to the suitability and qualification of tenderers, make recommendation as to the letting of the Building Contract;
(d) Act as superintendent for the purpose of the Building Contract;
(e) Provide the necessary liaison between the Client, the Architect, the Builder and the Consultants and co-ordinate their activities to achieve completion of each stage of the Building Contract on the agreed date and within agreed budgets;
(f) Ensure all communication between the Client, Architect, Builder, Consultants and Milk Chocolate are dealt with in a timely basis;
(g) Provide all direction, co-ordination, administration and review necessary or required by the Client in accomplishing completion of the Building Works in a timely and economical manner;
(h) Assure compliance with all Schedules management systems and programs and control cost and timing of construction of the Building Works generally and furnish reports thereon to the Client;
(i) Relay instructions given by the Client to the Architect, the Consultants and the Builder and any others in such a way and at such times as to ensure that these instructions are promptly and duly met;
(j) Render advice to the Architect, Builder, Consultants and Client in all matters so as to promote the most economical and efficient completion of the Building Works;
(k) Ensure prompt compliance with the requirements of all governmental and statutory authorities having jurisdiction over the construction of the Building Works;
(l) Arrange project meetings as provided herein;
(m) Report regularly to the Client;
(n) Continually monitor the program, budget and cash flow projections;
(o) In consultation with the Architect and the Consultants, advise the Client on all contractual, technical and administrative problems arising in the development so that overall policy may be continually reviewed; and
(p) Advise the Client of the need for any specialist Consultants to be employed in specified design functions and to frame terms of reference, conditions of employment and the like for any such specialist Consultants.
4. Appointment of Consultants
4.1. As part of the Project Management Services, the Client authorises Milk Chocolate to source relevant third parties who can provide services in relation to the construction of the Building Works pursuant to this Agreement, including but not limited to:
(a) the Architect or Draftsman;
(b) the Builder;
(c) relevant experts; and
(d) providers of building material required for the construction of the Building Works
(collectively the “Consultants”)
4.2. The Client acknowledges and agrees that, when Milk Chocolate sources the Consultants for the Client, Milk Chocolate is merely providing recommendations to the Client of the Consultants that Milk Chocolate reasonably believes is suitable for the Building Works. The Client should exercise its own judgment in selecting any Consultant for the Building Works as the Client will engage the Consultants directly and at its own costs. For the avoidance of doubt, Milk Chocolate shall not be responsible or liable to the Client for any act or omission of the Consultants.
4.3. Where either party to this Agreement wishes to remove or add Consultants over the course of this engagement, then this can only be undertaken by way of written Agreement by both Milk Chocolate and the Client.
5. Project Management Communication
5.1. Milk Chocolate may provide the Client access to a variety of communication methods that can be relied on to facilitate ongoing real-time communication between the Client, Milk Chocolate and the Consultants, including but not limited to the methods of communication set out in Item 5 of the Schedule.
5.2. Milk Chocolate may hold regular meetings of all Consultants or their representatives and the Client.
5.3. Milk Chocolate will take all reasonable steps to ensure that each Consultant shall present a progress report at the meetings focusing on time and cost issues that may require further action.
5.4. Notwithstanding anything to the contrary contained above, the Client shall be entitled to call for reports and ask questions in relation to the services of the Architect, Builder or the Consultants who are in attendance at the relevant project meeting.
5.5. The parties acknowledge and agree that communication between the parties is vital to the performance of the Project Management Services contemplated by this Agreement and the Client warrant that they will take all reasonable steps to ensure that any communication between the parties will be dealt with promptly and in line with the communication methods set out in Item 5 of the Schedule. Milk Chocolate will use reasonable endeavours to (but is not obliged to) use the communication methods set out in Item 5 of the Schedule to communicate with the parties.
6. Design, Planning and Building approval stage
6.1. Milk Chocolate shall oversee the preparation of the Plans and Specifications in final form and shall obtain the approval of the Client and all necessary consents and approvals from the relevant public authorities to enable approval to issue for the construction of the Building Works.
6.2. Milk Chocolate shall prepare any other necessary documentation required for the obtaining of the said consents and approvals from the relevant authorities and shall comply with all reasonable requests for information and requisitions by the said authorities with respect to the Building Works.
6.3. If the Plans and Specifications are required to be altered or amended to comply with any reasonable requirements of any public authority then Milk Chocolate shall cause such alteration or amendment to be made after having first obtained the approval of the Client.
7. Contract Stage
7.1. Milk Chocolate shall liaise with the Client and Consultants in preparing tender documents and shall recommend to the Client the names of suitable tenderers and specialist contractors.
7.2. Milk Chocolate shall arrange and effect the calling of tenders, shall analyse tenders received and make recommendations to the Client’s representative in relation thereto.
7.3. Milk Chocolate shall negotiate the terms and conditions of the Building Contract with the tenderer or tenderers determined upon by the Client’s representative following receipt of Milk Chocolate’s recommendations.
7.4. Milk Chocolate shall arrange for the Builder to furnish the construction program in the form of the proposed sequence of building works and timing thereof with detailed scheduling and a critical path. Milk Chocolate shall furnish the same to the Client upon receipt from the Builder.
7.5. Milk Chocolate shall arrange for the Builder to furnish cash flow projections to take account of any material changes in the construction programme from time to time.
8. Construction Stage
8.1. Milk Chocolate shall arrange for the Builder to commence construction of the Building Works as soon as practicable after execution of the Building Contract.
8.2. Milk Chocolate shall monitor the progress of the Building Works and coordinate activities of the Builder with those of the Architect and the Consultants. Milk Chocolate in monitoring the progress of the Building Works shall have particular regard to the construction budget and to the value of the construction and progress claims by the Builder in relation thereto.
8.3. Milk Chocolate shall keep the Client’s representative advised on all aspects of the construction of the Building Works, and in particular shall make recommendations on progress payments, variations, extensions of time and disputes under the Building Contract.
8.4. Milk Chocolate shall in association with the Architect and Consultants monitor the standard of workmanship, materials and equipment carried out or used on the project by the Builder and shall report thereon to the Client.
8.5. Milk Chocolate shall in association with the Architect and Consultants advise on the testing of materials and shall make recommendations as to such testing of materials as it considers desirable to be made.
8.6. Milk Chocolate shall arrange for any additional design work to be carried out which is required for the Building Works during the course of construction, and without limiting the generality of the foregoing including design work associated with variations under the Building Contract provided that the additional work is approved in writing by the Client. Milk Chocolate shall ensure that any additional design work complies with all applicable statutes, regulations, ordinances and by-laws and shall obtain all necessary approvals and certificates from the relevant authorities.
8.7. Milk Chocolate shall arrange for the issue of all certificates required to be issued under the Building Contract and obtain the certificate(s) of occupancy for the Building Works.
8.8. Milk Chocolate shall with due skill and care carry out all the obligations and duties of Milk Chocolate as required by the Building Contract of the superintendent therein defined.
8.9. Notwithstanding the foregoing Milk Chocolate shall not be liable for any negligent design on the part of the Architect or other Consultants engaged by the Client or for the full-time supervision of the Builders’ activities.
9. Commissioning Stage
9.1. Milk Chocolate shall in association with the Builder, Architect and Consultants arrange for the commissioning of all furnishing and equipment in the Building Works prior to practical completion of the Building Works and shall deliver to the Client all operation and maintenance manuals in relation thereto.
9.2. During the defects liability period under the Building Contract Milk Chocolate shall, subject to instructions from the Client, arrange for any necessary rectification or completion work to be promptly carried out and shall ensure that prior to the issue of a final certificate the Building Works is complete and in accordance with the plans and specification and has satisfied and complies with the requirements of all responsible authorities.
10. Funding the Building Works
10.1. For the avoidance of doubt, the parties acknowledge and agree that the Client cannot pay any of the amounts contemplated by this clause 10 by way of a mortgage.
11. Project Management Fees
11.1. Payment by the Client
(a) On execution of this Agreement, the Client must pay Milk Chocolate a preliminary fee set out in item 3 of the schedule (the “Preliminary Fee”).
(b) In addition to the Preliminary Fee, the Client shall pay to Milk Chocolate the remainder of the Project Management Fees in accordance with Item 3 of the Schedule in consideration of Milk Chocolate performing the Project Management Services.
(c) The parties acknowledge and agree that the Project Management Fees will be a flat fee and will be payable in stages pursuant to Item 3 of the Schedule.
11.2. Timing of payment
At or about the end of each payment period specified in Item 3 of the Schedule, the Client shall pay the relevant Project Management Fees to Milk Chocolate after submission of an invoice by Milk Chocolate to the Client. For the avoidance of doubt, the Client shall pay the full amount owing in respect of each invoice without set-off or deduction.
11.3. Out of pocket expenses
Milk Chocolate may with the prior written consent of the Client incur out of pocket expenses in connection with the provision of the Project Management Services. The amount of any such out of pocket expenses shall be invoiced and paid in the same manner as the Project Management Fees.
11.4. Interest on overdue payment
The Client agrees that in addition to all other rights and remedies of Milk Chocolate, if the Client fails to pay all monies as when due, Milk Chocolate shall be entitled to recover interest on the outstanding amounts, at the rate equal to the Cash Rate Target set by the Reserve Bank of Australia, plus 2% per annum.
12. Milk Chocolate’s obligations and rights
12.1. Milk Chocolate shall carry out its obligations hereunder promptly in a good and workmanlike manner using due skill, care and diligence.
13. Client’s obligations and rights
13.1. The Client hereby warrants that they appoint Milk Chocolate as their agent and authorise Milk Chocolate to take all reasonable steps required for the performance of the Project Management Services.
13.2. The Client shall provide clear and concise instructions within a reasonable period of time to Milk Chocolate.
13.3. The Client shall at its own cost and as soon as practicable make available to Milk Chocolate all information, documents and other particulars that Milk Chocolate requires in order to perform its obligations under this Agreement.
13.4. The Client shall act reasonably and in good faith in all dealings with Milk Chocolate.
13.5. The Client shall cooperate with Milk Chocolate and shall not interfere with or obstruct the proper performance of the Project Management Services.
13.6. The Client acknowledges and agrees that, while Milk Chocolate is authorised to act on your behalf, the Client is solely responsible for the payment of all third party costs payable in the course of the provision of the Project Management Services agreed to under this Agreement.
13.7. The Client hereby agrees to indemnify Milk Chocolate in respect of any direct loss and damage which may be directly suffered by Milk Chocolate as a result of any breach by the Client of the terms of this Agreement, or as a result of any act or default of the Client arising during the performance of the Project Management Services, such indemnity being capped at two times (2x) the Project Management Fees.
14. Assignment of Copyright
14.1. The Client acknowledges and agrees that all intellectual property in respect to the Plans and Specifications prepared in accordance with this Agreement (the “Documents”) will be subject to copyright and are protected by copyright under the laws of Australia and through international treaties.
14.2. Notwithstanding anything to the contrary in this Agreement or any agreement entered into between the Client and the Consultants, the Client acknowledges and agrees that by engaging Milk Chocolate to obtain the Documents on their behalf, the copyright in the Documents will remain with the author of the respective Document and an exclusive licence will be granted to Milk Chocolate to use the Documents for the construction of the Building Works pursuant to this Agreement.
14.3. Nothing in this Agreement transfers any licence to the Client for their use of the Documents and where the Documents have been used by any certifying authority, this does not assign any rights to the Client to continue to use the Documents without Milk Chocolate’s written approval, which may only be given at Milk Chocolate’s absolute discretion.
14.4. After payment of all Project Management Fees pursuant to this Agreement, Milk Chocolate warrants that they will take all reasonable steps necessary to ensure that the licence in the Documents is transferred to the Client.
14.5. Where this Agreement is terminated earlier, in consideration of the Client paying Milk Chocolate an exit fee of $0 (the “Exit Fee”), Milk Chocolate will, within seven (7) days of receipt of the Exit Fee, grant to the Client a non-exclusive licence to use the Documents for the sole and limited purpose of completing the construction of the Building Works.
14.6. The licence referred to in clause 14.5 is granted on the following terms and conditions:
(a) the Client must not:
(i) use the Documents other than for the purpose of completing construction of the Building Works;
(ii) reproduce the Documents or assist others to do so; or
(iii) cause or contribute to any dissolution of Milk Chocolate’s intellectual property rights with respect to the Documents;
(b) Milk Chocolate retains all licensing rights over the Documents and nothing in this Agreement grants any intellectual property rights to the Client other than what was expressly stipulated in this Agreement.
15.1. Termination by the Client
The Client may by notice in writing served on Milk Chocolate terminate this Agreement:
(a) if Milk Chocolate is in breach of the terms of this Agreement and the breach has not been remedied within 14 days (or longer period as the Client may allow) of the service by the Client on Milk Chocolate of a written notice specifying the breach and requiring the breach to be remedied;
(b) if the Client serves on Milk Chocolate a notice requiring that this Agreement be terminated on a date specified in the notice, being not less than 30 days after the date of issue of the notice; or
(c) if an Insolvency Event occurs in relation to Milk Chocolate.
15.2. Termination by Milk Chocolate
Milk Chocolate may by notice in writing served on the Client terminate this Agreement:
(a) if the Client is in breach of clause 11 of this Agreement and the breach has not been remedied within five (5) days (or longer period as Milk Chocolate may allow) of the service by Milk Chocolate on the Client of a written notice specifying the breach and requiring the breach to be remedied;
(b) if the Client is in breach of the provisions (other than clause 11) of this Agreement and the breach has not been remedied within 14 days (or longer period as Milk Chocolate may allow) of the service by Milk Chocolate on the Client of a written notice specifying the breach and requiring the breach to be remedied; or
(c) if Milk Chocolate serves on the Client a notice requiring that this Agreement be terminated on a date specified in the notice, being not less than 30 days after the date of issue of the notice. If Milk Chocolate terminates this Agreement pursuant to this clause 15.2(c) it will provide a refund to the Client of any Project Management Fees that have been pre-paid by the Client where the work has not yet been delivered by Milk Chocolate.
(d) if an Insolvency Event occurs in relation to the Client.
15.3. Effect of termination
(a) If the Client terminates this Agreement for any reason other than for breach of this Agreement by Milk Chocolate, then without prejudice to its rights and remedies under this Agreement or otherwise at law, the Client shall pay Milk Chocolate within thirty (30) days of a written demand from Milk Chocolate pro rata payment for the Project Management Services carried out for the period up to and including the date of termination based on an hourly rate of $100/hr + GST; or
(b) The termination of this Agreement shall not prejudice any other rights and remedies the parties may have under this Agreement one against the other.
16.1. Milk Chocolate shall ensure that:
(a) Milk Chocolate and the Architect and the Consultants have and maintain in force a current professional indemnity insurance policy and shall provide details of the same to the Clients; and
(b) The Builder has and maintains in force all insurance policies it is required to maintain under the Building Contract.
17. Limitation of liability
17.1. Milk Chocolate shall not be liable to the Client for any indirect, incidental, special or consequential losses, loss of reputation, loss of the use of property, loss of the use of money and payment of liquidated sums or damages under any other agreements, tort or economic damages whatsoever (including, without limitation, damages for loss of business, profits (whether incurred directly or indirectly), savings, goodwill, loss of business information or any other pecuniary loss or exemplary damages) which may be incurred by the Client, however caused and under any theory of liability.
17.2. Where legal liability cannot be excluded due to the applicable law, Milk Chocolate shall only be liable for such loss or damage whether consequential or otherwise (including, without limiting the generality of the foregoing, loss of use or occupancy or loss of profit whether arising by negligence of Milk Chocolate or those for whom it is responsible or howsoever caused) as is the subject of the policies required to be effected pursuant to clause 16.
18. Force Majeure
18.1. If a party is prevented from or delayed in performing an obligation by Force Majeure, and promptly acts to mitigate or remove the Force Majeure and its effect, then the obligation is suspended during, but for no longer than, the period the Force Majeure continues and any further period that is reasonable in the circumstances.
18.2. In this clause "Force Majeure" means an event beyond the reasonable control of the affected party, which occurs without the fault or negligence of the affected party.
19.1. No party shall divulge any confidential information obtained from the other in the performance of this Agreement.
19.2. Milk Chocolate may only assign its respective rights and obligations hereunder with the prior written consent of the Client, such consent not to be unreasonably withheld.
19.3. Nothing herein contained shall be deemed or construed to create the relationship of partners between the parties hereto.
19.4. The covenants, provisions, terms and Agreements contained herein expressly or by statutory implication cover and comprise the whole of the Agreement between the parties and the parties expressly agree and declare that no further or other covenants, Agreements, provisions or terms shall be deemed to be implied herein or to arise between the parties by way of collateral of other Agreement by reason of any promise, representation, warranty or undertaking given or made by either party to the other and such implication or collateral or other Agreement is hereby negatived.