Kane's Hire was the topic of our previous bulletin, "Is your affidavit logically, ethically and grammatically wrong?" In that Federal Court judgment, Jackman J criticised the process of witnesses attempting to recite word-for-word conversations when it may not be an accurate reflection of their memory. Jackman J indicated that doubt will be cast over the credibility of a witness who gives evidence in direct speech when they can actually only recall the substance or the "gist" of a conversation.
Historically, in New South Wales, evidence of conversations has often been ruled inadmissible by the courts unless expressed in direct speech, and there was some speculation as to how the courts in New South Wales would approach this issue following the Federal Court's decision in Kane's Hire.
That issue has now been resolved with the NSW Court of Appeal's decision in Gan v Xie  NSWCA 163, in which White JA agreed with the six principles for recording evidence of conversations set out in the Kane's Hire decision. In this bulletin we discuss the decision in Gan v Xie and its implications for the preparation of affidavit evidence in NSW proceedings.
Background of the case of Gan v Xie
The case concerned an appeal to the NSW Court of Appeal from the District Court.
In the District Court proceedings, Ms Gan alleged that Ms Xie had participated in a pyramid scheme and had made misrepresentations to Ms Gan, inducing her to invest in the scheme. Ms Gan sought to rely on evidence from two other investors about representations also made to them by Ms Xie.
A number of contentious issues regarding the evidence were raised during the hearing of the District Court Proceedings. Affidavits sworn by the two investors included their recollection of the gist of conversations they had with Ms Xie in Mandarin. Having professed their fluency in both Mandarin and English, the gist of those conversations were recorded by them in English in their affidavits.
The trial judge challenged the reliability and probative value of affidavit evidence sworn by the two investors. This was summarised by White JA:
"The primary judge reasoned that, because the witnesses only professed a recollection of the gist of what they were told and could not say when and in which particular conversation or conversations the statements were made or where the conversations took place, their evidence was unreliable" (at ).
Positive treatment of Kane's Hire
In Gan v Xie, White JA affirmed the principles espoused by Jackman J in the Kane's Hire decision which are summarised below:
- The form of evidence by a witness regarding a conversation should correspond with their actual memory
- If a witness only remembers the gist of the conversation, then indirect speech should be used
- If a witness remembers particular words, then quotation marks should be used for them while the rest of the conversation should be in indirect speech
- If a witness genuinely claims to recall the actual words, then direct speech should be used quoting the actual words spoken
- Where direct speech is used, phrases like "in words to the following effect" should not be used as preface because they blur the distinction between verbatim and gist memory
- A witness who claims to remember actual words but is later found to have exaggerated the nature and quality of their memory, may suffer an adverse finding to their credibility.
Differences between Gan v Xie and Kane's Hire:
In Kane's Hire, Jackman J criticised and questioned the reliability of a witness who gave evidence of conversations in direct speech, despite only recalling the gist of those conversations.
In Gan v Xie, the trial judge ruled that some of the evidence was inadmissible on the basis that it had been given in indirect speech. The Court of Appeal found that the trial judge "did not engage with the question of whether [the witnesses] should be accepted as having accurately recounted the gist, rather than the actual words" (at ).
In Gan v Xie White JA stated at :
"The fact that precise words used.are not recalled, does not mean that a person's memory of the substance or "gist" or what was said must be rejected. I agree with the following observations of Jackman J in Kane's Hire Pty Ltd v Anderson Aviation Australia Pty Ltd  FCA 381 at -."
Paragraphs - in Kane's Hire included criticisms by Jackman J of witnesses giving evidence of conversations in direct speech where their memory is limited to the gist of what was said. His Honour went so far as to describe it as "logically, ethically, and grammatically wrong" (Kane at ).
Notably at paragraph  of Gan v Xie, White JA held that any argument of inadmissibility on the grounds that evidence of the substance or gist of a conversation amounted to evidence of opinion, may be countered by section 78 of the Evidence Act 1995 (Cth), which provides that the opinion rule does not apply to evidence of an opinion expressed by a person if:
- the opinion is based on what the person saw, heard or otherwise perceived about a matter or event
- evidence of the opinion is necessary to obtain an adequate account or understanding of the person's perception of the matter or event.
Conversations in Other Languages
In the original decision, the trial judge took issue with evidence of conversations that took place in Mandarin and were expressed in English. Despite some of the witnesses affirming that they were fluent in both languages, the trial judge rejected the evidence because the witnesses did not depose to the words said in Mandarin with those words translated by an accredited translator. As a result of this ruling the witnesses made further affidavits in Mandarin and those affidavits were translated into English and admitted into evidence subject to objections.
On appeal White JA referred to the "Recommended National Standards for Working with Interpreters in Courts and Tribunals" when preparing an affidavit for a witness who is 'culturally or linguistically diverse' and held that Ms Gan's affidavits that were interpreted to her complied with that standard. The standard did not require her to depose using Mandarin characters and then have the Mandarin script translated into English by an accredited translator.
White JA stated that "'The primary judge's insistence on an accredited translation of the witness' recollection of the Mandarin words spoken, where the witness professed fluency in both Mandarin and English, is only explicable on the basis that her Honour regarded the actual words said as vital" (at )'.
Timing of Conversations
White JA also made note of the fact that the trial judge failed to consider that the witnesses "may have been mistaken as to date and place, but not as to the substance of what was said" (at ).
Ultimately, the Court of Appeal found that the trial judge had erred in their findings, and the fact that the "precise words used, and the specific occasion 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" (at ). Ms Gan's appeal was allowed, and a new trial is due to be held before the District Court.
White Pointer Investments Pty Ltd v Creative Academy Group Pty Ltd  NSWSC 817
On 25 July 2023, the NSW Supreme Court adopted the approaches of Kane's Hire and Gan v Xie, in a decision regarding an oral contract that was alleged to have been made during a long, "boozy" lunch several years ago.
In White Pointer Investments Pty Ltd v Creative Academy Group Pty Ltd  NSWSC 817 Rees J found that the affidavit evidence of a witness for the plaintiff, given in direct speech, ought to be given little weight as it was apparent from cross examination that his actual recall of the conversation was slight (at ).
The Court did not discount the deponent's evidence on account of the passage of time but did discount it to the extent to which it departed from the contemporaneous documents. The Court also did not discount the deponent's evidence on the grounds that he had been consuming alcohol at the time as there was no evidence tendered in the proceedings as to "how much was drunk by whom, and how affected by alcohol [the deponent] may have been" (at ).
Gan v Xie confirms that the principles laid out in Kane's Hire are applicable to the preparation of affidavit evidence in NSW.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.