In 1880 John Shepherd commenced the great slander case case against him, claiming that Dibbs had slandered him by saying that Shepherd had committed adultery with the wife of Dibb's brother John. Shepherd obtained judgment for £2000 plus costs, which Dibbs refused to pay and Dibbs was imprisoned at HM Prison Darlinghurst for a year. During his incarceration he was reported in the Sydney Morning Herald as having a suite of rooms, his own manservant to make life tolerable, and a woodworking shop where he made gifts for some 3500 visitors. Ladies decorated his cell with flowers. The wprdworking lathe was supplied by Parkes. Dibbs was perceived by the electorate as the virtuous underdog, Shepherd as the villain, and on his release on 6 May 1881, he found his political popularity restored.