In our Evidence Act 2006, the veracity rules concern particular kinds of character evidence. They may be used by a defendant to show a propensity to tell the truth, or by a prosecutor to show a propensity to tell lies. Either way, evidence of veracity is only admissible in limited, specified, circumstances.
Confronting a witness with a prior inconsistent statement is not of itself a challenge to the witness's veracity, because veracity refers to a general tendency, not to a particular instance.
Evidence that is admissible independently of the veracity rules is not therefore subject to the constraints of those rules. The veracity rules can permit the adducing of evidence that would not otherwise be admissible.
There are limits on the use of leading questions in examination and in re-examination of a witness. In re-examination a witness may be asked to clarify an ambiguity or an apparent contradiction in evidence given in cross-examination. The witness might also, in re-examination, be presented with a prior inconsistent statement – inconsistent with what the witness said in cross-examination - and asked to explain the inconsistency. This is not, of itself, necessarily cross-examination, although whether it is, and therefore whether it is only permissible if the witness is hostile, is a matter to be determined as an exercise of judgment in the particular case.
A defendant who uses a complainant's prior inconsistent statement is not using it as evidence of a lie, but rather as evidence of the truth (R v Davidson  NZCA 410). But even if the prior inconsistent statement was being used as evidence of a lie, it would not for that reason alone be evidence of (lack of) veracity: it is particular, not evidence of a general disposition. The prior inconsistent statement is admissible as soon as the inconsistency emerges, and the veracity rules are irrelevant.
And obviously, a defendant is not shielded, by the limits on the use of evidence of veracity, from his own prior inconsistent statements (R v Tepu  NZCA 460,  3 NZLR 216). The veracity rules are again irrelevant, the prior inconsistent statements being particular in nature, not evidence of a general propensity to lie.
These points are made in Hannigan v R  NZSC 41 (26 April 2013). They certainly seem obvious, although the Court split 4-1. The Chief Justice dissented on the grounds that the rule prohibiting cross-examination by a party of its own witness (s 94) should have been applied. This conclusion follows from a different judicial assessment of the quality of the questioning than was made by the majority.
The case was decided on that difference, but the obiter nature of the judicial observations on the veracity rules should not detract from their authoritative status. They give guidance that is obviously of assistance, and (I sarcastically add) at the current rate at which the Court refuses leave to appeal – because counsel don't identify appropriate grounds – we would otherwise have to wait hundreds of years for another opportunity for the Court to clarify the veracity rules.
Anyway, before Hannigan the law on the admissibility of evidence of veracity was uncertain, and the appellant's case was indeed arguable. The dissent illustrates this.
Elias CJ considered the relationship between s 37(4) and s 94. She held that in this case the questions in re-examination were leading and cross-examination , , and that therefore hostility had to be established. She accordingly disagreed with the majority on the nature of the questions in this case -. She also held that a finding of hostility is always required before a party can cross-examine its own witness, irrespective of whether a prior statement is independently admissible . Significantly, Elias CJ pointed out  that the majority approach to the definition of veracity evidence in s 37(5) ignored the particular aspect of the definition: a disposition to refrain from lying, whether generally or "in the proceeding". She took a wide view of when a witness might be held to be hostile , and concluded that in this case the judge could, after proper inquiry, have concluded that the witness was hostile .
Recently I heard someone say that dissenting judgments tend to become the law in a few decades. No they don't. Dissents very rarely become the law, and it is only because of this rarity that they are noticed when they do, and their tendency to become law is exaggerated. It is not unusual for judges to disagree about the law and about its application to the circumstances of the case they have to decide.
But the effect of Hannigan is to iron out a crinkle in the definition of veracity evidence that occurs in s 37(5). The definition as enacted is too broad insofar as it includes a disposition to lie "in the proceeding". The majority have interpreted s 37(5) by ignoring that inclusion, and have thereby restored the original intention behind the legislation: to restrict evidence of collateral issues. As the majority note at , the Law Commission in "The 2013 Review of the Evidence Act 2006" NZLC R 127 (February 2013) has recommended a change to the definition of veracity evidence along similar lines (see 6.56 – 6.69 of the Report). The majority in Hannigan has in effect changed the definition in response to the difficulties that the Law Commission has summarised.
While looking at the Law Commission's report I should say something about its treatment of concerns that have been expressed about s 30 of the Evidence Act 2006. I agree with the Commission's recommendation that the section, which addresses when improperly obtained evidence may be excluded, does not need changing except in a minor way that the courts have anticipated. Decisions under s 30 have troubled academic commentators, who focus on the very few cases that are apparently wrong, rather than on how the section works satisfactorily in the overwhelming majority of cases. I often encounter younger colleagues who, just out of law school, regard s 30 as a "whatever-the-judge-wants-to-do" sort of provision. I hope that attitude does not reflect a failure of teaching. It is much more interesting to work out how judicial decisions under s 30 may be predicted, than to offer unconstructive and uninstructive criticisms.