The Property Investors Alliance Pty Ltd v C88 Project Pty Ltd (in liq) [2023] NSWCA 291

This brings to mind the recent observations of Jackman J in Kane’s Hire Pty Ltd v Anderson Aviation Australia Pty Ltd [2023] FCA 381 at [121]-[129] (which were referred to approvingly by White JA (Simpson AJA and Basten AJA agreeing) in Gan v Xie [2023] NSWCA 163 at [119]) regarding the use of direct speech in affidavits. In particular, Jackman J said the following at [127]-[129]:

The practice of witnesses and lawyers working up a version of a conversation in direct speech (whether or not prefaced by the phrase “in words to the following effect”) from the witness’s actual memory merely of the substance or gist of what was said is logically, ethically and grammatically wrong. It is 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 actual words spoken simply from their gist. It is 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. It is 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.

The form in which evidence of conversations is given should reflect the difference between verbatim memory and gist memory. While in general terms gist memory tends to be more stable and durable over time than verbatim memory, possibly because it has engaged with higher reasoning processes which interpret and give meaning to what has been heard superficially, it will often be the case that certain words or phrases can actually be remembered verbatim. It would appear that verbatim memory and gist memory of conversations are not merely different in degree, but are also different in kind: see C J Brainerd and V F Reyna, “Fuzzy-Trace Theory and False Memory”, (2002) 11(5) Current Directions in Psychological Science, pp 164-169.

Applying that reasoning, the following general principles apply to the form of evidence of conversations:

(1)  The form of the evidence should correspond to the nature of the actual memory the witness has of the conversation: Wright at 19; Noble at [4] and [20]; LMI Australasia at [8]; Hamilton-Smith at [83]. There is no reason in the abstract to think that evidence in direct speech is more reliable or credible than evidence in indirect speech, or vice versa.

(2)    If the witness remembers only the gist or substance of what was said, and not the precise words, then the evidence should be given in indirect speech (also known as reported speech), in terms which reflect the witness’s actual memory: Wright at 19; Noble at [4], [20]; LMI Australasia at [8]; Hamilton-Smith at [83].

(3)    If the witness claims to remember particular words or phrases being used, then those words or phrases should be put in quotation marks to indicate that they are verbatim quotations, even if the evidence is otherwise given in indirect speech: see Wright at 19; LMI Australasia at [10].

(4)   If the witness genuinely claims to recall the actual words used in a conversation, then the evidence should be given in direct speech; that is, quoting the words as actually spoken: LMI Australasia at [8]; Hamilton-Smith at [83]. Apart from rare cases of photographic memory, this may well be the case where the witness has made a detailed contemporaneous note of the conversation, and has refreshed his or her memory from the note (in which case this should be expressly stated along with the tender of the note).

(5)    Evidence given in direct speech should not be prefaced by the phrase that the conversation occurred “in words to the following effect”. That expression blurs the important distinction between verbatim memory and gist memory, and leaves the Court unable to ascertain which kind of recollection is being claimed by the witness. This is a different point from the one considered by Bromwich J in Director of Public Prosecutions (Cth) v Country Care Group Pty Ltd (Ruling No 1) [2020] FCA 1670 at [11], where the only argument against admissibility was the erroneous contention that evidence of conversations can only be given in direct speech of what was actually said.

(6)   Evidence of a witness who claims to remember the exact words of a conversation, but who is found after cross-examination to have exaggerated the nature and quality of his or her memory, may well suffer an adverse effect on his or her credibility (the weight of which will depend on all the circumstances). However, the inability to cross-examine in that manner a witness who gives evidence in indirect speech is not unfairly prejudicial within the meaning of s 135 of the Evidence Act 1995 (Cth): LMI Australasia at [9].