Panel 1: As we continue on with Elly's day in Inverted Reality Court, Sullen holds up her super-complex diagram and tells people that it's Exhibit A.
Panel 2: Lynn again ignores facts in the service of a joke by having Elly get sworn in AFTER she hands her diagram to the court. She's told to place her left hand on the Bible and raise her right hand so that Lynn can take a swipe at a judge who "didn't let her keep up" by having Sullen says the phrase "Do you solemnly swear to tell the whole truth and nothing but the truth, so help you God?" as if it were one word.
Panel 3: For some reason, this amuses Elly and she gets a panic attack because she's about to have an attack of the giggles right there and can't possibly help herself. Her attempt to stifle herself makes Sullen confused.
Panel 4: Since he assumes that he's dealing with some poor, out of her depth housewife who thinks that adding two demerit points to her licence makes her a hardened criminal, he reassures her by stating that since we're not actually dealing with a criminal offence, there is no need for her to break down in tears like she looks to be doing.
Summary: The joke's on him because Elly is about to commit perjury when she lies about having actually seen anything until it was too late.