Note that I refuse to take sides in this disagreement. I am writing this to offer an unbiased perspective on this stressed situations.
The Free Socialist State of Paloma and the Baustralian Empire ended diplomatic relations on June 10th, after Paloman President Aidan McGrath was dishonorably discharged from Baustralia for refusing to attend a court case. The government of Baustralia has refused to state the reason for the case that led to McGrath's discharge from the nation, beyond one count of insubordination and four counts of refusing to soldier. The Crown has refused to comment using the Vienna Convention as their defense, but the Orblian Observer can confirm that McGrath was sued after he renounced his citizenship and made several negative statements about HM King John I.
In the days preceding the court-martial and the subsequent passing of the Persona Non-Grata (McGrath, No. 2) Act, Aidan renounced his Baustralian citizenship after becoming tired of the Baustralian government and desiring to look for new experiences elsewhere. He also insulted the King, calling him "a stroke and a thief" among other things. The Baustralian administration refused to recognize the renounciation and took legal offense to McGrath's statement regarding the King. This sequence of events contributed to the court-martial against Aidan but, as he did not see himself as being a Baustralian citizen, refused to attend. He was then dishonorably discharged as a persona non-grata by Baustralia.
Following the situation in Baustralia, McGrath used his powers as President of Paloma to cut all direct diplomatic ties between the two nations while the Baustralian administration removed themselves from the Great Lakes Council, a regional cooperation organization presently headed by Paloma. In addition, Aidan McGrath released a statement about the situation which reads, in part: "I have been given persona non-grata status in the Kingdom with no reason other then the King and is government care too much about its ego for someone to call and claim they are crooked. I even denounced my citizenship a few days before I started to use freedom of speech, which the Baustralian government then took the opportunity to attempt to trial me for 'insubordination'. Baustralia has clearly lost care of freedom of the opinions of its citizens. If nobody can speak what they want without fear, then the Baustralian government is slowly turning into a authoritarian regime in the clothes of the constitutional monarchy."
Baustralia has come under fire from the Paloman President for violating international law. In a vast majority of both UN-recognized nations and so-called micronations, one can revoke their citizenship of a nation if they have citizenship of another. The Baustralian monarchy has rebutted this claim, stating that he could not leave the nation because the court-martial was already pending against him, and McGrath would not be allowed to escape the enforcement of military law. In addition, McGrath has claimed that the actions taken after he made negative statements about King John were a violation of free speech. McGrath has come under fire from the Baustralian News Network and others for pettiness. Lord Jenkinson of Worthing is quoted as saying, in part, that "[Baustralia has] been very welcoming of McGrath, booting him from positions, then allowing him to take another position elsewhere."
It is important to note that this is not the first time McGrath has been removed from Baustralia through a persona non-grata act. The Persona Non Grata (McGrath) Act was issued on April 6th, 2020 and stripped him of his military titles and medals, also giving him just two days to remove all belongings from Baustralia. The official reasoning for this removal was that he was wasting money. Aidan's statement on the subject was as follows: "If I was wasting money and then someone would have told me, I would have payed it. This is all just some final solution crap conspiracy from Little Nicky [Prime Minister Nick Sullivan]. If they give me a chance to pay it back and remove the persona non-grata then problem solved."
UPDATE 15 June 2020: Rewritten with new information from the Baustralian monarchy and the Paloman President.