Errorr on Exchange #5.7.1 smtp;550 5.7.1 Unable to relay

By milancas1 ·
I'm getting the below error on my 2003 exchange server -

The following recipient(s) cannot be reached:

xxx xxxxxx ( on 21/02/2012 11:17
You do not have permission to send to this recipient. For assistance, contact your system administrator.
<servername.localdomain.local #5.7.1 smtp;550 5.7.1 Unable to relay>

The strange thing is that I get this error just intermittently (once, twice a day) and when I restart Default SMPT Virtual Server, it's fine again and all emails are sent fine.
I was using a smart host in Default SMPT Virtual server without any SMTP connectors and never got this error before. But then I had to create SMTP connector pointing to the same smart host as we installed 2010 exchange on 2008 server in one of our branch offices and SMTP connector was needed in addition to the internal one (from our 2003 to 2010 exchange) for emails routing to 2010 exchange.
Any help much appreciated

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