Real estate agent's businesses owed more than $400,000 in unpaid rent, documents reveal

Real estate agent and strata business owner Frank Morella has been ordered to leave the Kingston office building that two of his businesses have operated from.

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A decision published by the ACT magistrates court earlier this month found Canberra Commercial and Canberra Strata, both owned by Mr Morella, had failed to pay rent for their offices at 4 Kennedy Street.

The building is owned by Castelfelice Investments, of which Mr Morella was also a director.

Signage at the Kennedy Street address in September 2025. Picture by Karleen Minney

After Castelfelice Investments defaulted on a loan given by St George Bank, receivers started the process of selling the Kennedy Street building, according to the published decision.

Neither Canberra Commercial nor Canberra Strata had paid rent in some time, and there was no written lease agreement in place, the court found.

However, there were lease proposal documents between the companies and Castelfelice Investments from 2022, and both tenancies were listed in Canberra Commercial's 2025 "tenancy schedule", which contained information about the leases in the building.

There was a "considerable consistency" between the terms in the lease proposals and in the tenancy schedule, the court found.

According to the terms of those documents, the two companies together owed more than $400,000 in unpaid rent.

The receivers for Castelfelice Investments were concerned the lack of written lease agreements would reduce the price they would be able to obtain from the sale of the building, the decision said, preferring to offer vacant possession of the building.

In October 2025, the receivers informed both Canberra Strata and Canberra Commercial their leases would be terminated, and that they were required to vacate the premises.

Canberra Strata continued to occupy the building, arguing the termination was unreasonable as it was attempting to pay the outstanding rent.

A creditors winding up order was made against Canberra Strata in March this year.

Canberra Commercial signs still up in November

The liquidators for Canberra Commercial, which had entered into administration in September 2025, agreed to the termination of the lease.

According to the court's decision, however, in November 2025, a private investigator attended the Kennedy Street address, and reported that signs outside the building continued to advertise both Canberra Commercial and Canberra Strata.

Two of the units were occupied by Canberra Strata, and the remaining two were occupied by a company called CFM ACT Pty Ltd.

A business card obtained by the investigator from Alison Stewart, who was in the CFM units, stated she was the asset manager for Canberra Commercial.

A month earlier, the liquidators for Canberra Commercial had written to Ms Stewart to demand she stop trading under Canberra Commercial's business name and representing that she had purchased the business, the court said.

The court found it was unclear the capacity in which Ms Stewart was at the property.

Cost orders made against Canberra Strata

Justice Angus Stewart found the termination of both the leases was reasonable.

He cited the year since Canberra Strata was first made aware of Castelfelice Investments' intention to collect, the difficulty selling with no written lease, and the unlikelihood that either Canberra Strata or Canberra Commercial would be able to pay the rent owed.

The court confirmed the leases were terminated in October 2025, and that both companies were required to vacate the premises.

Justice Stewart also ordered Canberra Strata to pay Castelfelice Investments' costs, agreeing with the submission that the company's approach to proceedings had "increased the costs of the proceedings unnecessarily".

"It was inevitable that I would conclude that it was reasonable to terminate Canberra Strata's lease," Justice Stewart said in his judgement.

"Canberra Strata's continued defence of the proceedings only delayed the inevitable."

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