Although Halliday and Hasan use a restricted notion of reference based on textual rather than extra-linguistic relations, they still acknowledge that the
relationship of reference may be established situationally. For example, a given pronoun may refer to an entity which is present in the context of
situation rather than in the surrounding text. The first- and second-person pronouns are typical examples in that they do not refer back to a nominal expression in the text but to the speaker and hearer (or writer and reader) respectively.