Cardinal George Pell rebuffed the testimony of former colleagues who said he was far more aware of the details of the infamous John Ellis case than he maintains as he appeared before a child abuse inquiry in Sydney.

The cardinal, appearing at the royal commission into institutional responses to child sexual abuse, also defended the legal strategy the church deployed when Ellis sued.

Pell, who will take up a senior role at the Vatican on Monday, dismissed a suggestion by senior counsel assisting the commission that his proclaimed ignorance of key details – including the amount requested by Ellis in compensation – was “inconceivable” given his deep involvement in the case.

The commission's eighth public hearing is examining the Catholic church’s response to allegations made by the former altar boy Ellis, who was abused by his parish priest, Father Aidan Duggan, in Sydney between 1974 and 1979. Ellis sued the church in 2007 but lost when the supreme court ruled the church as an entity could not be sued.

On Monday Pell laid much of the blame for the bungling of the Ellis case at the feet of the former director of the NSW-ACT professional standards office John Davoren and the former vicar general and chancellor of the Sydney Catholic archdiocese, Monsignor Brian Rayner. On Monday morning Pell described Davoren as "a muddler" who was "sometimes illogical".

He said he should have paid closer attention to the way the case was being handled but was at the time “much too inclined” to trust statements from others because of who the person was and take them “at face value”.

Throughout his testimony, and under some aggressive questioning from the commission, Pell maintained his ignorance of Ellis’s request for $100,000 in compensation and of the counteroffers from the church of $25,000 and $30,000, saying he believed it was in the order of millions of dollars and this was why the case was so vigorously defended.

Pell had been significantly involved in the case in a number of ways, Gail Furness SC told the hearing, including discussing it at a meeting of bishops because the case was “out of the ordinary” and Pell was seeking advice from his fellow bishops.

Pell had also already written a letter to Ellis saying the matter “couldn’t be satisfactorily resolved", agreed to a medical assessment of Duggan, approved the appointment of an assessor, read that assessor’s report and was involved in the appointment of a facilitator.

“In all of those circumstances I suggest to you that it is inconceivable that having been involved in each of those steps, you were not made aware of the amount offered by or put forward by Mr Ellis and the responses by the church authority," said Furness.

“It is not a question of what's conceivable or logically possible. The fact is I wasn’t. I wasn't informed about any of this," replied Pell.

Furness also questioned Pell on why, in the church’s response to Ellis’s complaint, it could not offer the pastoral care element – that of dealing with counselling and spiritual needs – of the Towards Healing process when litigation commenced.

“Certainly that should have been made available,” said Pell of the spiritual counselling. “But if the dialogue kept going while the litigation was on it risked grievous confusion.”

Furness suggested there was no reason of principle as to why the church could not engage in a pastoral way.

“There’s no Christian reason why not to [have both pastoral care and litigation],” said Pell. "I thought that it was not good legal practice.”

“Why didn’t the church man come to the fore?” asked Furness.

“Because it was a legal case,” said Pell.

Pell also stridently defended the supreme court’s finding that the church’s trustees could not be sued, what is commonly referred to as the Ellis defence, describing his statement – previously revealed to the commission on day one of the hearing – that “the church in Australia should be able to be sued” as simply “one passing reference”.

He said in the light of the problems with Towards Healing he thought a separate entity should be set up which would have perpetuity and could be sued by any future complainant.

When asked by the commissioner Justice Peter McClellan why justice did not "require the same response to the past", Pell said: "As an Australian citizen the church has the same rights as any other citizen."

"In other words, we have every right to defend ourselves in law," he continued.

Pell conceded the counteroffers of $20,000 and $30,000 were not an appropriate financial response, and said his assessment that the extra $5,000 offered was “grotesque” was “further indication I had nothing to do with it”.

Ellis's request, and further requests for the same amount, an acknowledgement, and an apology, were rejected. The church eventually spent more than $1.5m defending the litigation suit.

Given the final cost of the legal action, Pell said it was very annoying that it could have been settled for $100,000, but he had not taken anyone to task over the mistake, except in his mind.

“Monsignor Rayner should have told me,” said Pell.

“Well Monsignor Rayner said he did tell you,” said Furness.

“Yes, well I reject that,” replied Pell.

McClellan questioned why it didn’t occur to Pell to question how much Ellis was asking for before the cardinal committed to employing a “large city firm” as legal defence.

"I had good advisers. I had many things on," said Pell.

"And also, it's on the record, Monsignor Rayner, for better or worse, felt that he wasn't interested in settling.”

On Monday afternoon Pell continued to lay much of the blame for mistakes made in the Ellis case with Davoren and Rayner. Davoren delayed appointing an independent assessor of the Ellis complaint. Davoren left his position in 2003, replaced by Michael Salmon.

“I had become increasingly disenchanted with Mr Davoren. I was delighted Mr Salmon was on board, and I think he has done and continues to do an excellent job,” said Pell.

An independent assessor was appointed in June 2003, bringing to the cardinal’s attention that Davoren’s own assessment – upon which many decisions had been based – was not a legitimate assessment under Towards Healing.

Pell asked Rayner to leave in 2005 “because things were going from bad to worse".

“He disintegrated. He kept grabbing hold of completely the wrong end of the stick,” said Pell. “I was putting out the fires that inadvertently Monsignor was starting.”

During the afternoon, as Pell defended the church, an elderly man clutching a framed photograph of a woman was dismissed after shouting that the cardinal “should be ashamed” of himself, to applause from the crowd.

Furness also drew applause when she challenged Pell’s statements that the number of claims and rates of abuse among the clergy may be exaggerated, and formally called for the data and research which supported his notions.

Pell had told the commission on Monday morning he believed the Australian arm of the church was ahead of many other countries in its moves to address the large number of claims of abuse. In contrast, he said the attitude of "some people in the Vatican" at the time was that claims of child abuse were "accusation by enemies of the church to make trouble … and should be taken sceptically", with the "benefit of the doubt [given] to the defendant".

The hearing continues on Tuesday, while questioning of Pell continues on Wednesday.