Key takeaways

Kane’s Hire Pty Ltd v Anderson Aviation Pty Ltd [2023] FCA 381 (Kane’s Hire) and Gan v Xie [2023] NSWCA 163 (Gan) both arose as a direct result of the different approaches lawyers have taken when preparing evidence in an affidavit. These cases serve as an important reminder that:

• A witness must not give evidence of a conversation in direct speech unless they can recall the specific word or form of words used. The form of evidence should reflect the nature of the actual memory the witness has of the conversation
• Any particular words or phrases that the witness remembers should be included in quotation marks. This will show that they are identical to the words and phrases that were used originally, even if the evidence is otherwise given in indirect speech
• ‘Working up’ a conversation (even if prefaced by the phrase “in words to the following effect”) to only capture the substance or gist of a conversation is “logically, ethically and grammatically wrong” as the Court is unable to ascertain which kind of recollection is being claimed by the witness
• Conversations in affidavits should be carefully drafted to ensure that they capture the witness’s actual memory. If the witness can only recall the gist or substance of a conversation and not the actual words which were said, the conversation should be given in indirect speech
• Evidence given in direct speech can be equally reliable and credible as evidence given in indirect speech
• A witness may suffer adverse credibility findings if found to have exaggerated the nature and quality of their memory under cross-examination.

Kane’s Hire Pty Ltd v Anderson Aviation Pty Ltd [2023] FCA 381

In Kane’s Hire, Jackman J scrutinised the accuracy of recording conversations in direct speech if the witness could only recall the gist or substance of the conversation.

In obiter, Jackman J scrutinised the usual practice in NSW to express conversations in direct speech with the caveat that they are “words to the following effect”. His Honour’s view was that if a witness cannot recall the actual words used in a conversation, including this caveat would be “logically, ethically and grammatically wrong”.

Jackman J deemed this long-standing practice in NSW as:

• logically wrong because “it reverses the logical process of deriving the meaning or substance of what was said from the actual words which were spoken; one cannot derive (as distinct from guess at) the words spoken simply from the gist”
• ethically wrong because “the evidence given as a result of that process conceals the true nature and quality of the witness’s memory, and conveys a false impression of that memory”, and
• grammatically wrong because “the use of quotation marks indicates as a matter of conventional usage that the relevant expression is a quotation of the exact words which were spoken. It could not be said that this practice is allied to an iron sense of principle”.

His Honour did not regard pairing direct quotes with the preface “in words to the following effect” to be able to circumvent the undesirable consequences of using direct speech in an affidavit. In fact, Jackman J stated that this pairing makes “it impossible to ascertain…which words (if any) have been recalled…as the exact words used in a conversation…and which elements are the product of reconstruction”.

Gan v Xie [2023] NSWCA 163

Jackman J’s comments in Kane’s Hire were revisited by the NSW Court of Appeal in Gan, which highlighted how conversations in evidence should be treated by the Court if the witnesses did not have a ”separate and specific recollection of particular words…in any specific conversation”.

White J (with whom Simpson AJA and Basten AJA agreed) took the approach that “the fact that precise words used, and the specific occasions on which words were used, are not recalled, does not mean that a person’s memory of the substance or ‘gist’ of what was said must be rejected”.

Gan endorses the approach taken by the Federal Court in Kane’s Hire that when drafting conversations in affidavits, it is imperative that the words reflect the witness’s actual memory. If the witness has a clear memory of the actual words used, direct speech is appropriate. Otherwise, indirect speech should capture the gist of what was said. Therefore, if used properly, both direct and indirect speech can be equally as effective.

Further information / assistance regarding the issues raised in this article is available from the author, Megan Palmer, Partner, Jackson Price, Lawyer, or your usual contact at Moray & Agnew.