The farmers of Cowwarr had long blamed government incompetence over nearly three decades for their woes, but when they were denied the right to claim compensation for loss of land, productivity, and private infrastructure in 1978 they decided to take further action.

Some legal scuffling between Barnes and the SRWSC followed in the Victorian court system, during which minor points were won and lost on both sides, after which a government offer of loans - but not the desired compensation - was rejected by the farmer group.

Barnes meanwhile had become aware of the Hutt River Province and seeking to emulate "Prince Leonard" took legal advice and then declared the unilateral secession of his property from the State of Victoria on 23 July 1979.

Public attention was again focused on Cowwarr, and the existence of the State of Rainbow Creek ensured that Barnes remained a thorn in the side of the SRWSC and the Victorian Government for a number of years, as he issued passports, stamps, banknotes and other printed material to promote the cause of his farming community.

Ill health eventually forced Barnes to retire to Queensland in the mid-1980s, from where he has since published several books of local history and poetry, whilst the issues that led to the Rainbow Creek secession remained unresolved.