Cardinal George Pell says he knew nothing about "grotesque" compensation offers made by the Catholic church to the victim of a pedophile priest and he blames staff for the aggressive handling of the case.

On his first day before the royal commission into child sexual abuse, Dr Pell said that if former altar boy John Ellis had been paid $100,000 to settle his abuse case it would have been "an excellent outcome".

The church eventually spent $1.5 million aggressively defending the 2004 case brought by Mr Ellis, who was sexually abused by Bass Hill priest Father Aidan Duggan from the age of 13 to 17 in the 1970s.

Dr Pell, the former Archbishop of Sydney, told the commission that Australia's Catholic church was far ahead of attitudes to sexual abuse held in the Vatican in the 1990s, where complainants were regarded as enemies of the church.

"The attitude of some people in the Vatican was that if accusations were being made against priests, they were being made exclusively or at least predominantly by enemies of the church to make trouble, and therefore they should be dealt with sceptically," Dr Pell said.

Attitudes in Rome did not change until much later, said Dr Pell, when a delegation of American bishops "explained vigorously to the Vatican that it wasn't just the enemies of the church who were doing it, as the Nazis had done and possibly the communists.

"But in fact they were genuine complaints, and good people, people who loved the church, were saying it's not being dealt with well enough," he said.

Dr Pell repeatedly denied knowing Mr Ellis had sought $100,000 in compensation, contradicting the evidence previously given to the commission by former key advisers.

He said Professional Standards Office director John Davoren was "muddled" and former vicar-general and chancellor of the Sydney Archdiocese, Monsignor Brian Rayner, "continually got hold of the wrong end of the stick".

His private secretary Dr Michael Casey, he said, was only surmising when he told the commission last week his boss would have known what money an abuse victim was offered and every other witness who said they told the cardinal Mr Ellis had asked for $100,000, were all mistaken.

Dr Pell also denied knowing the church had at first offered $25,000, then $30,000 to Mr Ellis, describing the sums as "mean", "grotesque" and "totally inappropriate".

He blamed Mons Rayner for not keeping him informed about the case, contradicting the monsignor's earlier evidence that Dr Pell was told of all offers made to and by Mr Ellis.

Dr Pell said he ended up asking Monsignor Rayner to leave his job because it was "completely beyond him".

Despite having read Mr Ellis's complaint, discussed the case with other bishops and engaged law firm Corrs Chambers Wesgarth to defend the case, Dr Pell told counsel assisting the commission, Gail Furness SC, he never asked why attempts to settle the case through the church's Towards Healing system failed.

"I realise I should have done more in that direction," Dr Pell said.

The commission heard the cardinal had never called anyone to account for the handling of the case despite its cost.

"I'm not the sort of fellow who runs around blaming people for misunderstandings," Dr Pell said.

He also defended a letter he sent to Mr Ellis on Christmas eve, 2002, from which he had removed a suggested phrase which had read "as you are aware, this is not to suggest you are not believed".

He told the commission the sentence was "inconsistent" with the church's position that Mr Ellis's case could not be proven.

"The whole point of this letter was to say the matter couldn't be resolved and I don't like talking out of both sides of my mouth, especially to a victim," Dr Pell said.