He said Ms Norvill was, at times, "prone to exaggeration and embellishment", including when she alleged the cast and crew in the Sydney Theatre Company's 2015-16 production of King Lear were complicit in Mr Rush's inappropriate behaviour because they failed to speak out against it.

Justice Wigney said this was a "sad and unfortunate case" and it would have been better for everyone involved had it been dealt with outside this "harsh and adversarial" forum, he said.

Justice Wigney said it was not for the court to "provide some broader social commentary" on sexual harassment in the theatre or entertainment industry, or defamation laws in Australia.

Mr Rush, 67, sued Rupert Murdoch's Nationwide News for defamation over two articles and a newsagent poster alleging the actor was involved in inappropriate behaviour towards an unnamed co-star during the 2015-16 production of King Lear.

The first article, published on the front page of The Daily Telegraph on November 30, 2017, was headlined "King Leer". Justice Wigney said the second article, on December 1, "doubled down" on the claims.

The co-star at the centre of the stories was not named but was later revealed to be Ms Norvill, who played King Lear's daughter Cordelia.

Ms Norvill did not cooperate with the newspaper before the stories were published but subsequently agreed to give evidence for the Telegraph in court.

Mr Rush vehemently denied the claims and said the articles conveyed a string of false and defamatory imputations about him, including that he was a "pervert" and a "sexual predator".

On Thursday, Justice Wigney said he accepted Mr Rush's evidence.

Nationwide News had denied the articles conveyed those imputations but, in the event Justice Wigney found those claims were conveyed, it had relied on a defence of truth. Justice Wigney rejected the defence outright.

Tom Blackburn, SC, for Nationwide News, told the Federal Court in November last year that the Telegraph's first front-page report had been "carefully constructed" to emphasise the actor's denials.

Justice Wigney said at the time that there was "considerable merit" in Mr Blackburn's argument but the denials  would have had more force if the article had not been headlined "King Leer".

He added the headline accompanying the story inside the newspaper – "Star's Bard Behaviour" – was akin to "very large puffs of smoke suggesting there's a fire there".

Ms Norvill told the court Mr Rush stroked down the side of her right breast to her hip during a preview performance in late 2015 and she "believed he had done it deliberately".

She also gave evidence Mr Rush rubbed her on her lower back under her shirt, "up to the line of her jeans", "very softly and lightly" tracing the skin above the waistband while they were offstage. She said Mr Rush stopped touching her on the back on another occasion after she said "Please stop that."

Ms Norvill said director Neil Armfield told Mr Rush after the 2015 preview performance that his gestures had become "creepy" and "unclear" and needed to be more "paternal". Mr Armfield and Mr Rush rejected that account.

Ms Norvill said that during a rehearsal of the same scene, she heard "titters of laughter" and opened her eyes to find Mr Rush kneeling over her and simulating groping her, including "cupping" above her breasts, while "raising his eyebrows, bulging his eyes, licking his lips".

Ms Norvill said Mr Armfield reprimanded Mr Rush by saying "Geoffrey, stop that," a claim Mr Armfield also denied.

Justice Wigney asked Mr Rush in the witness box if he had "intentionally groped" Ms Norvill.

"No, I did not," Mr Rush replied.

Mr Rush's barrister, Bruce McClintock, SC, said: "If it's an accident, we win."

The court heard Ms Norvill made an informal complaint to STC company manager Annelies Crowe at a pub in Annandale in April 2016, which was recorded in an email Ms Crowe sent to colleagues on April 6.

Ms Crowe said in the email that Ms Norvill had "revealed that she was sexually harassed on multiple occasions by Geoffrey Rush during rehearsals and the season of King Lear".

"In the beginning, she had heard rumours about Geoffrey's behaviour in the past but believed she had a platonic, intellectual relationship with him, and didn't feel the need to steer clear of him," Ms Crowe wrote.

Ms Crowe said she had seen Ms Norvill was "very upset" after the closing night of King Lear and added that "knowing Geoffrey's reputation I'm afraid I'd assumed he may have been the cause but didn't want to push her at the time".

Ms Crowe was subpoenaed by the Telegraph but did not give evidence in court for either side.

Justice Wigney said while Ms Crowe's email had received significant media attention, she had not been called to give evidence and he proposed to attach "zero weight" to her comment about Mr Rush's alleged reputation.