Cairns restaurants: New Lillipad Cafe opens after closure of Grafton St favourite

A new incarnation of an iconic Cairns city vegan and vegetarian restaurant is back by popular demand.

A new incarnation of a much-loved vegan and vegetarian brunch spot in Cairns is back by popular demand.

The original The Lillipad Cafe closed after 21 years in business on October 28, with owner Yuri Kagan citing the non-renewal of its Grafton Street lease as the reason for its closure.

Despite financial setbacks resulting in the liquidation of his business, Mr Kagan said he was excited to be working with the management of a new Lillipad after regular customers of the old cafe “demanded it”.

“I was quite moved, a number of business people with various offers came forward with suggestions for me to continue to cook this food,” Mr Kagan said.

Inside The Lillipad Cafe on Grafton Street, before it closed down. Picture: Anna Rogers.

“One of the people to reach out was Sky from Elixir offering her unique space.”

The new and improved Lillipad, owned and launched by a Cairns-based business family, will now cook up their delicious meals from inside the Elixir Music House kitchen.Located on Abbott street, Mr Kagan said the new location, which opened on Sunday, December 15, will offer the same menu and reliable hours as always.

“We’re open from 7am-2.30pm, seven days a week, cooking up the same great meals” he said.

“All the staff are coming with me.”

Despite the Lillipad Pty Ltd owing significant debts, including upwards of $600,000 in unsecured creditors, and about $50,000 in unpaid wages and superannuation, Mr Kagan said all legal processes were followed.

“No personal profit was made from the liquidation,” he said.

An iconic Cairns vegan and vegetarian restaurant is back by popular demand despite falling into liquidation just months before.

Liquidators have raised concerns about possible breaches of director duties which are under investigation.

“Honestly I was OK to walk away, but within a matter of days of news of our closure, I was being stopped in the street by many Lillipad regulars expressing their disappointment,” Mr Kagan said.

A report published by Partner Advisory, Todd Kelly at BDO Liquidators, on October 17, 2024 documented the restaurant had entered liquidation in July.

In the report Mr Kelly outlined the Lillipad had ceased trading on July 28, which effectively ended the business.

Mr Kagan said two Sydney investors, who had shown interest in franchising his business before Covid-19, had come to his rescue and backed the business, which meant he could continue serving up “great food”.

Owners of the Elixir Music House Sky Rixon and Bill Shields. File photo. Picture: Brendan Radke

He was able to continue trading for an additional three months at the Grafton Street address, before the lease was terminated.

“Everything was done legally, and this process was completed by July 29th,” he said.

Mr Kagan said he been introduced to the Sydney investors through “legal contacts” in Brisbane.

It was at this time, Mr Kagan said he informed the Grafton street landlords about his business entering liquidation and a transfer of ownership was to proceed.

“It was agreed a transfer of the lease would be provided to the new business,” Mr Kagan said.

Interior of The Lillipad Cafe on Grafton Street before its closure. Picture: Anna Rogers.

But it is understood problems arose due to paperwork delays and a lack of responses from the Sydney investors, which Mr Kagan said led to tensions between parties.

“Ultimately, after months of delays, the landlord, a large family with members in multiple cities, decided to lease the property to another party, despite an offer from a neighbouring kebab shop owner,” he said.

Mr Kagan said the landlord gave two weeks’ notice before proceeding with a different lease agreement.

“I want to be clear, I don’t hold a grudge against anyone concerned: landlords, ATO or the liquidators. Everyone is just doing their job,” he said.

Looking ahead, Mr Kagan said he and his staff were entering a new chapter, working for Lillipad Cafe on Abbott Street.

Documentation of the new registered business was provided to The Cairns Post by the business owner.

“This was a fresh start, and legal processes were followed,” Mr Kagan said.

“After careful consideration, the decision was made to enter liquidation because paying off the debt seemed unfeasible,” he said.

Lillipad Cafe owner Yuri Kagan. Picture: Brendan Radke

As of October 17, and according to the Statutory report by the assigned liquidators, The Lillipad Pty Ltd still owes a total of $825,059.

These debts include $49,682 of wages and unpaid superannuation, $647,492 of unsecured creditors debt and $127,885 in secured creditors.

The report also outlining concerns about possible “breaches of duty” and “insolvent trading”.

Assigned BDO liquidator, Todd Kelly, said the owing amount of unpaid Superannuation Guarantee Charge was the “number advised to him by the ATO”.

“We are currently relying upon the most recent information provided to us by the ATO, which is that Proof of Debt submitted to us by the ATO,” Mr Kelly said.

At the time of the report, My Kelly recorded a total of money remaining in the bank to be $60.28.

“It may be that the company has been insolvent for some time prior to liquidation, but it is presently unclear what the extent of any claim may be until further investigations are carried out,” Mr Kelly wrote in the report.

“Based on my investigations to date, it appears the director may have breached his director’s duties, including his obligations to exercise a reasonable degree of care and diligence in the exercise of his powers and the discharge of his duties,” he continued.

The restaurant was known by regulars for it “massive” portions, Lillipad Cafe dishes up the all day breakfast - the Full Monty and French toast. Picture: Brendan Radke

The document also detailed Mr Kelly’s intention to report the directors “possible breaches” to the Australian Securities and Investments Commission.

“Once my investigations have been finalised, I intend to report my investigations into the director’s possible breaches of his duties to the ASIC,” he said.

In response to these claims, Mr Kagan told The Cairns Post, all the debts he could pay, such as super, had been settled.

“They (ATO) garnished our account in January, they were taking I think 20 per cent from our credit cards and they were paying off the super,” he said.

When asked to provide a copy of the superannuation payment, Mr Kagan said he no longer had access to his accounts.

“I have no access to any of that as of three months ago,” he said.

“My guess would be the liquidation office would have that information”.

The Cairns Post has been unable to obtain proof of payment to the amount of $49,682 for wages and superannuation owing.

The business owner maintained no illegal activities took place, stating the business was not sold on, and no personal profit was made from the liquidation.

Grafton Street landlord, Angelo Caravella, said the situation was out of his hands, however, the Caravella family wished Mr Kagan all the best and hoped he resolved his outstanding issues in due course.

Elixir Music House was approached for comment but did not respond before print.

Originally published as Cairns restaurants: New Lillipad Cafe opens after closure of Grafton St favourite