The Supreme Court says the Principality of Hutt River has to pay tax after all

Prince Leonard. Image: Supplied.

The Supreme Court in Western Australia has ruled that the Principality of Hutt River, Australia’s oldest micronation, must pay tax — about $3 million to start with.

Justice Le Miere today ordered that Prince Leonard, who formed the breakaway state in 1970, pay the Australian Tax Office (ATO) $2.77 million for tax owed in the seven years to 2013. Another $242,669.53 must be paid by his son, Arthur Wayne Casley.

The princes of Hutt River had argued that the court did not have jurisdiction because the principality is an independent sovereign state.

“That argument has no legal merit or substance,” Justice Le Miere ruled.

“Anyone can declare themselves a sovereign in their own home but they cannot ignore the laws of Australia or not pay tax.”

The principality’s position has always been that the ATO had ruled Hutt River as a “non-resident” for tax purposes.

Following the ruling, the principality is looking at a range of options and responses, including a human rights case, based on torture through mental cruelty via the ATO.

“Of course we don’t have $3 million sitting around to pay them,” Prince Graeme told Business Insider.

Prince Leonard, now aged 91, earlier this year stepped down as sovereign in favour of Prince Graeme, his youngest of four sons, a former primary school teacher.

The family established the micronation, 595km north of Perth, after an argument over wheat production quotas.

Hutt River is a significant tourist attraction with its own coins and stamps which it offers to collectors worldwide.

Prince Leonard has always maintained that the principality’s secession has been acknowledged by Australia.

In the 1970s, he received a letter from then Governor-General Sir Paul Hasluck addressing him as the “Administrator of the Hutt River Province” which was, he said, legally binding recognition of the principality.

And last year a letter was received from Buckingham Palace addressed to “Prince Leonard” with the Queen’s good wishes on the anniversary of the principality seceding from Australia.

The principality has an honours list of its own and regularly appoints new knights and dames.

Among those honoured are musician Keith Kerwin, awarded a knighthood for composing the principality’s national anthem, and late writer Colleen McCullough who was a Baroness of Hutt.

The principality stands out among micronations in that its honours are awarded on merit alone. They cannot be purchased.

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