It Ain’t Over Till The Fat Lady Sings

De Mond and Fisherhaven tenders: No crime maybe, but still fundamentally flawed

Opinion by Gerard Grobler/Whalecoastreport

The long-running legal battle over the De Mond Caravan Park lease came to a sudden halt on 29 August 2026, when the High Court review application challenging the tender award for De Mond was formally withdrawn. Coupled with the National Prosecuting Authority’s decision earlier this year to drop criminal investigations due to insufficient evidence, Democratic Alliance (DA) leadership has framed the outcome as a complete exoneration—clearing the path for Mayco member Clinton Lerm’s mayoral candidacy.

While the criminal slate may be clean, confusing a lack of criminal charges with sound administrative management misses the core issue facing Overstrand ratepayers.

The Real Difference: Criminal Law vs. Public Process

• The Criminal Finding: The Hawks investigated whether corrupt acts occurred under the Prevention and Combating of Corrupt Activities Act (PRECCA). The Director of Public Prosecutions says they found no proof of such acts.
• The Public Process Issue: This clearance does not validate the municipality’s compliance with statutory asset transfer rules. A process can be completely free of criminal intent while remaining procedurally flawed under municipal administrative law.

The Legal Scorecard: Laws and Regulations Bypassed

To understand why these tenders provoked intense public resistance—and why the new Fisherhaven process remains vulnerable—it helps to examine the exact legislative framework governing municipal property:

1. Municipal Asset Transfer Regulations (MATR) – Chapter 4 & Regulation 5

The Law: Under the Municipal Finance Management Act (MFMA) read with MATR Chapter 4, before a municipality signs off on a long-term lease for high-value public land, Council must grant “in-principle approval” after conducting a dedicated public participation process. The community holds a statutory right to comment on whether the land should be commercialized at all.

The Transgression: The municipality treated a standard supply-chain tender advert in a newspaper as “public consultation”. By awarding the tender first and pushing public engagement down the road to the Site Development Plan (SDP) phase, the administration bypassed mandatory pre-tender civic consultation.

2. Code of Conduct for Councillors – Item 6 (Municipal Structures Act)

The Law: Item 6(2) mandates that if a councillor’s business associate stands to acquire a direct benefit from a municipal contract, the councillor must disclose full particulars at the first meeting of the municipal council at which disclosure is possible.

The Transgression: While Cllr Lerm recused himself during specific internal Mayco voting sessions, active shared directorships with winning tender directors were not proactively disclosed to the full Council at the earliest statutory opportunity. Relying on passive entries in declaration registers falls short of the proactive, full-disclosure duty required under statutory ethics rules.

3. Municipal Supply Chain Management (SCM) Policy & Regulations

The Law: Section 115 of the MFMA mandates that the Accounting Officer (Municipal Manager) must maintain a transparent, fair, and competitive SCM policy free from administrative overreach. By law, the Municipal Manager acts as the final appellate and accounting authority, meaning they are strictly required to remain independent of committee voting processes.

The Transgression: Direct site meetings took place between political office-bearers and competing tenderers prior to bid evaluations. Furthermore, when internal deadlocks or splits arose between evaluation and adjudication panels, the Municipal Manager allegedly cast the deciding vote during the adjudication process to push the award through—blurring the legal line between accounting oversight and committee decision-making

4. Promotion of Administrative Justice Act (PAJA) – Section 3

The Law: PAJA requires that any administrative action materially affecting public rights or legitimate expectations must be procedurally fair. This requires giving citizens a reasonable opportunity to make representations before binding decisions or rights are assigned.

The Transgression: Assigning commercial rights through a signed lease before offering residents a say on the commercialization of the site constitutes pre-determination under PAJA, stripping the public of meaningful administrative recourse.

Repeating the Pattern at Fisherhaven

The initial 25-year lease for the Fisherhaven Yacht Club site (Erf 775) lapsed after statutory conditions were not met during court delays. The municipality subsequently approved a temporary 15-month lease to keep the site operational while initiating a new 25-year tender process.

Once again, the municipality is putting the cart before the horse:

1. The Reversed Approach: The tender is awarded first, promising that the public can give feedback later when the developer submits a Site Development Plan (SDP).
2. Why This Limits Public Input: By the time an SDP reaches the public, the commercial lease is already signed. Residents are no longer permitted to object to the macro-decision—such as whether the land should remain a community green space—and are restricted to commenting on micro-technicalities like fence lines, building heights, or road access.

Strategic Leadership Changes

As these long-term land deals move forward, key decision-makers have exited the local stage:

• The Municipal Manager (the chief accounting officer responsible for administrative oversight and signing off on the tender processes) has been deployed to George Municipality through the election period.
• The Council Speaker (responsible for internal council ethics oversight and investigating councillor conduct under Schedule 7) is stepping down from politics.

The Mounting Bill: Who Pays for the Legal Battles?

Beyond procedural flaws, another critical question facing the community is the financial impact of these legal disputes. Defending two complex High Court applications over the De Mond and Fisherhaven tenders required senior counsel and extensive litigation over two years—a process that inevitably incurred substantial legal bills. Ratepayers are entitled to know the exact total spent from municipal coffers to defend these disputed tender procedures, who will ultimately foot the bill, and whether accounting officers or political decision-makers should be held personally accountable under Section 32 of the MFMA for fruitlessly expending public funds on procedurally flawed processes.

The Bottom Line for Ratepayers

Good governance requires following public participation rules. Pushing public input to the end of the process deprives the community of its right to help shape the future of the Overstrand coastline. Ratepayers deserve transparency before long-term contracts are signed, not explanations after the ink is dry.