Edit: Since this post went up, the case of DPP v Nair  ACTCA 17 has affirmed that, under Commonwealth law, no motive or reason for a witness to give untruthful evidence needs to be shown before leave under s 38 may be granted.
The new Evidence Act will bring lots of changes to the way contested hearings are conducted. Some of these are big and others are small.
Section 38 hands the prosecution a significant tactical advantage. It clears away the existing common law on adverse and hostile witnesses, and replaces it with a single provision relating to unfavourable witnesses.
38. Unfavourable witnesses
(1) A party who called a witness may, with the leave of the court, question the witness, as though the party were cross-examining the witness, about—
(a) evidence given by the witness that is unfavourable to the party; or
(b) a matter of which the witness may reasonably be supposed to have knowledge and about which it appears to the court the witness is not, in examination in chief, making a genuine attempt to give evidence; or
(c) whether the witness has, at any time, made a prior inconsistent statement.
(2) Questioning a witness under this section is taken to be cross-examination for the purposes of this Act (other than section 39).
(3) The party questioning the witness under this section may, with the leave of the court, question the witness about matters relevant only to the witness’s credibility.
Note The rules about admissibility of evidence relevant only to credibility are set out in Part 3.7.
(4) Questioning under this section is to take place before the other parties cross-examine the witness, unless the court otherwise directs.
(5) If the court so directs, the order in which the parties question the witness is to be as the court directs.
(6) Without limiting the matters that the court may take into account in determining whether to give leave or a direction under this section, it is to take into account—
(a) whether the party gave notice at the earliest opportunity of the party’s intention to seek leave; and
Note Paragraph (a) differs from the Commonwealth Act and New South Wales Act.
(b) the matters on which, and the extent to which, the witness has been, or is likely to be, questioned by another party.
(7) A party is subject to the same liability to be cross-examined under this section as any other witness if—
(a) a proceeding is being conducted in the name of the party by or on behalf of an insurer or other person; and
(b) the party is a witness in the proceeding.
Though this breaks with tradition, the provision is not necessarily inconsistent with the original intent of the rules on leading and non-leading questions, discussed in Mooney v James  VLR 22. Though a witness is usually expected to be favourable to the party that calls them, this isn’t invariably the case.
R v Souleyman (1996) NSWRLR 712 established that unfavourable isn’t the same as hostile or adverse, merely meaning “not favourable”.(Though in R v Kneebone (1999) NSWLR 450, it was found that a witness’s evidence was not necessarily unfavourable just for failing to accord with the Crown’s case theory).
A claim of no recollection might be considered unfavourable: GAC  NSWCCA 315, see also R v Lozano  NSWSC 237. The application is usually made in examination-in-chief, but may be made in cross-examination: R v Pantoja  NSWSC 565. Or it might be made in re-examination in exceptional circumstances: R v Kingswell  NSWSC 412 and R v BDF  NSWCCA 98.
In BDF, Dowd J observed:
 There is a considerable tendency for those familiar with the law before the Act, to find the procedure of s 38 of the Act somewhat difficult to adjust to. Section 38 of the Act is one of the most important provisions of the new Evidence Act. Although there appears to be something unjust about a witness who is cross-examined by the opposing party and then subject to cross-examination by the party calling the witness, this is clearly the intention of the Act. The unfavourable evidence which comes out may come out at any stage.
There’s no requirement that the unfavourable evidence to be unexpected, and nothing improper about calling a witness to put to them a prior inconsistent statement (see the discussion of Lee‘s case, below). Once admitted, a prior inconsistent statment can be used by the trier of fact as the truth of it, even if it is a statement the witness now denies is truthful: Adam v The Queen (2001) 207 CLR 96 (a case where Stephen Odgers appeared for the appellant). The prosecution can call a witness intending or at least prepared to make a s 38 application. Despite sub-s (7), the cross-examination should be restricted to the extent of the unfavourable evidence: R v Hogan  NSWCCA 292, also GAC.
Although relatively simple, the consequences of s 38 will require a strategic re-think in many cases.
In the past it was commonplace to draw the prosecution’s attention to the existence of certain witnesses whose evidence might be favourable to the accused and adverse to the prosecution case, and rely on the prosecution to honour its obligation to call all relevant witnesses. In future, the prosecutor might call such witnesses but, if their evidence is unfavourable, may also have the opportunity to cross-examine them!
Lee v R  NSWCCA 259 is a simple and practical demonstration of how s 38 operates. Lee was charged with sexual assault against his son’s teenage girlfriend. His wife was called as a witness and gave evidence that the accused had attempted to have intercourse with her earlier in the night in question, but had been unable to obtain an erection.
The evidence of sexual dysfunction was considered unfavourable to the prosecution’s case as it tended to contradict the Crown case of a penile sexual assault occuring a number of hours later. An application to cross-examine the wife was made and granted. On the appeal, the accused took issue with both leave to cross-examine being given, and the instructions given to the jury as a result.
The NSW Court of Criminal Appeal rejected the argument.
 As I understood oral submissions, counsel contended that, because the prosecutor anticipated the unfavourable evidence (and assuming rejection of his other submissions) that the prosecutor’s application to cross examine was “a contrivance” and that therefore leave should be refused, because to grant it would be unfair. Reliance was, in particular, placed under s 192(2)(b) of the Evidence Act. In his reasons his Honour revealed that he had given express consideration to this and no error in his determination has been shown.
 I would reject ground 1.
After almost fifteen years of application in NSW s 38 is now generally understood, and so uncontentious that the Court of Criminal Appeal could dispose of such a ground of appeal in one paragraph without detailed recourse to the numerous authorities on it.
In Victoria it will be a novel concept that, for a time, we’ll struggle to grapple with. As Dowd J observed, the ability of the prosecution to call a witness expressly for the purpose of discrediting their evidence or attempting to prove that it is untrue strikes practitioners familiar with the previous common law position as unfair.
But unless Victorian courts adopt a radically different approach to those in NSW, that is precisely what will occur on a regular basis.