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Based on what you have described, Yes - if they have no basis for forming this opinion, and the details are fabricated... this is a case of Defamation.
You have 1 year from the date the cause of action arose to make a Defamation claim with the Court.
My recommendation is to engage a lawyer to write a "concerns notice" specifying the imputations (defamatory items) of concern...
They can then offer to make amends, which if you accept, could resolve this situation without the need to take it to Court.
Please advise if you would like me to provide a quote for legal assistance to assist you by drafting and sending the "concerns notice" pursuant to the Defamation Act 2005 (NSW).
I have also sent an offer to talk further about the matter over the phone, if that would be beneficial for you.. and so you can email me a copy of the relevant defamatory material, and I can provide additional feedback.
Please accept and rate my response, cheers, James