Logging company to pay damages of K353,350

Malaysian owned logging company, Sentawan (PNG) Ltd, has been ordered by the National Court to pay K353,350 in unpaid rent plus interest and legal costs to a New Ireland businesswoman.

Sentawan (PNG) Ltd is owned by four Malaysian nationals. Ngie Yung Lau owns 40% of the shares, Ngie Hung Lau 25%, Chu Kwong Ling another 25% and Ambrose Tiong Hong Lau the remaining 10%.

Ngie Yung Lau also owns 39% of the shares in the giant logging company Vanimo Jaya Limited, where he is the largest single shareholder and a director. He is also a shareholder and director in many of the other companies in the Vanimo Jaya group.

Vanimo Jaya has been one of the largest exporters of logs from Papua New Guinea over the past 20-years.

Logging companies in the Vanimo Jaya group have operated in six different provinces over the past 20-years. In that time they have exported more than 5 million cubic metres of logs with a declared value of around K1.7 billion.

Sentawan itself has been harvesting and exporting logs from the Danfu concession in New Ireland since 2006.

Over the 16 year period to 2021, Sentawan exported 1,176,263 cubic metres of logs with a declared value of about US$120 million (or K420 million).

Despite the vast sums of money earned by Sentawan and the Vanimo Jaya group from the harvesting of Papua New Guinea’s forests and the export of unprocessed round logs, it has not always been diligent in paying its bills.

The award of damages in the National court arose from a lease agreement over land used by Sentawan for a log pond from which it exported logs harvested in the Danfu concession.

In 2019, the owner of the land, Elizabeth Carrol, issued court proceedings against Sentawan for breach of a commercial lease agreement over the land known as Portion 34, Millinch Muliama, Formal Feni in New Ireland.

The lease agreement was initially signed in August 2007. Under the agreement Sentawan was granted rights to use the land to store, mark and trim logs in preparation for loading and shipment.

The initial rent was agreed at K2,500 per month for a period of five years.

During this initial five-year period, Sentawan exported logs with a declared value of US$32 million (which would have provided the company with an average income of around K1.8 million per month)

When the lease expired, Sentawan continued to occupy and use the land and pay the rent.

In May 2017, the parties agreed to an increased rent of K10,000 per month. Although Sentawan initially paid the new rent they then defaulted and reverted to paying the old rate of K2,500 a month.

This was despite the fact Sentawan had more than doubled its rate of harvesting and was now earning an average of K4 million per month from its log exports.

At the same time the company also issued court proceedings in an attempt to restrain Elizabeth Carrol from entering the property. Those proceedings were eventually dismissed with costs ordered against the company in July 2021.

In September 2019, Elizabeth Carroll wrote to Sentawan terminating the lease agreement giving the company one-month to vacate the property.

The following month the plaintiff issued court proceeding to recover the outstanding rental arrears accrued from 2016.

The defendant logging company then proceeded to try and obstruct the court proceedings. It failed to comply with court directions and did not appear for court hearing dates. In August 2021 the court struck out the defendants filed defence for failure to comply with earlier court orders. The defendants lawyers repeatedly failed to respond to letters and phone calls from the plaintiff’s lawyers.

On 11 March, Justice Linge, entered a summary judgement against Sentawan (PNG) Ltd in the sum of K353,350.

He also ordered interest be paid at the commercial rate of 15% on the outstanding rental payments and for Sentawan to pay the entire costs of the legal proceedings.