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The 55-year-old had been charged with seven counts of indecent assault and six of common law assault against four women during a run of the world-famous musical in Australia.
Melbourne magistrate Belinda Wallington on Tuesday dismissed all 13 charges.
However, she wanted it known the four complainants "were brave and honest witnesses". She also rejected suggestions the women colluded against McLachlan.
In one incident, he was accused of tickling a co-star's thigh from behind as she performed.
While the magistrate accepted the woman's evidence, she did not find the touching amounted to assault or indecent assault.
McLachlan would play tricks on the cast to make them laugh, and seemed to have thought touching the woman in this way was funny, Ms Wallington said.
She could not exclude the possibility that an "egotistical self-entitled sense of humour led the accused to genuinely think that (the woman) was consenting to his actions".
McLachlan was also accused of tracing his finger around the outline of another woman's vagina while they performed a "bedroom" scene.
Prosecutors said this wasn't part of McLachlan's role as Dr Frank-N-Furter.
The court was told he'd previously made jokes about the woman's "little slit" being visible through her costume.
Ms Wallington concluded McLachlan stopped touching the woman when he became aware she didn't consent, and also dismissed that charge of indecent assault.
McLachlan has always denied all allegations against him.
In another incident, a woman said McLachlan climbed into her lap as she relaxed backstage, straddled her and kissed her neck.
"Too much? Did I linger too long?" she said McLachlan told her.
Ms Wallington said the woman was a reliable witness, and did not say or do anything to indicate consent.
"It seems counter intuitive to find an accused not criminally liable for such sexual harassment," she said.
But the magistrate again could not dismiss the possibility that McLachlan, in his "egocentric state" and without any checks and balances on lewd behaviour, was not aware of this.
McLachlan was similarly found not to have assaulted, indecently or otherwise, the same woman by kissing her in her dressing room.
She again said she did not consent, and that McLachlan had knelt before her, said she was beautiful and that he couldn't stop thinking about her.
Ms Wallington expressed dismay at the way the actor's legal team, led by Stuart Littlemore QC, took aim at his accusers' behaviour, what they wore and made remarks about one woman's "slutty" poses for photographs.
"I was not assisted by the lines of questioning ... that called into question the reputations of the complainants, sexual or otherwise, (or) the poses they struck," she said.
The magistrate also noted laws around the standard of proof required for consent had changed since the time of the allegations.
Current standards, that look at whether an accused's belief in consent is reasonable, are not retrospective and may have changed the outcome of the case, she said.
During a contested hearing last month, McLachlan described one of his accusers as the "most vulgar" person he'd ever met.
He said he'd always been "energised and enthusiastic and over the top in the workplace".
The Gold Logie-winning actor did not appear in person for Tuesday's decision and instead tuned in remotely from Sydney.
Afterwards, he told reporters he'd maintained "a dignified and respectful silence for the past almost three years" and put his trust in the law.
"We aren't going to speak in any detail today. We will certainly do so in the immediate new year. As you can imagine, we have a lot to say," McLachlan said.
He became a household name for his roles on Australian soap operas Neighbours and Home and Away, won a Gold Logie in 1990 and more recently led the Ballarat-filmed TV series Doctor Blake Mysteries.
In 2018, he launched defamation action in NSW against a former co-star, the ABC and Fairfax Media, since merged with Nine Entertainment.
That case was delayed until after criminal proceedings against the actor were finalised.