Halliday & Matthiessen (1999: 179):
… since processes occur in time — their mode of existence is temporal — that is how they are tied to the speech situation; whereas participants exist in some kind of referential space, which may be grounded concretely in the speech interaction (this = ‘near me’; that = ‘away from me’) but may also be a more abstract discoursal space. The latter is the space where we ‘record’ discourse referents as we work our way through a text (this = ‘about to be mentioned (by me); that = ‘mentioned earlier’).