MARK COLVIN: Australia's most senior Catholic leader, George Pell, came to the child abuse Royal Commission today to answer serious questions about his conduct in the case of abuse victim John Ellis.

Cardinal Pell has apologised for the gross violations and abuse by Father Aidan Duggan, and admitted to a string of mistakes made by him and officials from the Sydney Archdiocese in how they responded to Mr Ellis over many years.

But the Cardinal moved to distance himself from crucial decisions of the Archdiocese.

Emily Bourke reports.

EMILY BOURKE: Mistakes, misunderstandings, illogical muddlings; these were the admissions of Cardinal George Pell over the church's handling of the Ellis case, and they were followed by expressions of regret and apologies.

GEORGE PELL: My own position is that you never disbelieve a complaint.

EMILY BOURKE: But that's not always been the case. Cardinal Pell, who is heading to the Rome next week, gave the Royal Commission a candid description of the Vatican's attitude to abuse allegations in the years before Mr Ellis came forward.

GEORGE PELL: The attitude of some people in the Vatican was that if accusations were being made against priests they were made exclusively, or at least predominately, by enemies of the church.

EMILY BOURKE: According to Cardinal Pell's testimony, the fate of the Ellis case and the costly legal mess that it became, was set early in the piece, during the Towards Healing process.

GEORGE PELL: If we had had an accurate assessment from the start, in other words, one that was validated by successive examinations, the trajectory of the case certainly would have been different. Where we've finished up, I don't know.

EMILY BOURKE: The early failings according to Cardinal Pell were not made by him, but by John Davoren of the Professional Standards Office.

GEORGE PELL: I had a very hands-off approach to that. I did not want to be accused of interfering in that assessment, and Mr Davoren's a very good man, he worked hard to help the victims, but he was a muddler and sometimes he wasn't logical. He didn't seem to have a scrupulous understanding or commitment to exactly following protocols.

EMILY BOURKE: Mr Ellis sought $100,000 in compensation. The church offered of $25,000, and later $30,000 when Mr Ellis lost his job.

GEORGE PELL: The suggestion that I would agree, after a man has lost a job of $3,000 a year that I would agree to offer him $5,000 extra by way of compensation, I regard has grotesque.

EMILY BOURKE: The Towards Healing process broke down, and so began a hard fought a legal battle that left Mr Ellis a broken man. Cardinal Pell has admitted that the litigation was perhaps too well fought by the church's legal team, and it was a mistake to reject Mr Ellis's offer of mediation.

Cardinal Pell told the inquiry that he explicitly endorsed the major legal strategy to vigorously defend the case, but wasn't involved in the day-to-day running of the matter.

Under questioning by counsel assisting, Gail Furness, he said he had many discussions about the Ellis case, but he trusted his advisers and officials in the Archdiocese, especially when it came to money matters.

GAIL FURNESS: 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.

GEORGE PELL: Well once again, it's not a question of what's conceivable or logically possible. The fact is that I wasn't. I wasn't informed about any of this.

GAIL FURNESS: Well it's certainly possible, isn't it, that you now don't recall it, but you did ask the question and were told that Mr Ellis had put forward $100,000?

GEORGE PELL: Very remote possibility. The only way in which that remote possibility might have come about is if he put forward $100,000 and refused to give a release. I might have put that into only too normal a basket, but I've got no such recollection.

MAN: You should be ashamed of yourself Cardinal!

(Applause)

EMILY BOURKE: Cardinal Pell has said he should have been more vigilant, and should have exercised more regular and stringent oversight.

GEORGE PELL: As I think I said when meeting with Mr Ellis, if we thought we could have concluded the thing for $100,000 and that opportunity slipped away, most unfortunate.

You know I'm not the sort of fellow who runs around blaming people for misunderstandings.

(Laughter in courtroom)

GAIL FURNESS: Well it cost the church, or its insurers, an awful lot of money not settling for $100,000 didn't it?

GEORGE PELL: I'm more aware of that than most people.

EMILY BOURKE: As to whether victims should be able to be sue the Catholic Church in Australia, Cardinal Pell was questioned on how that might happen.

GEORGE PELL: I was suggesting that we set up a corporation sole, and that that corporation sole would have a perpetuity and would appoint and supervise people so that if their successors, if, God forbid, there were any other Mr Ellises would have somebody to sue.

PETER MCCLELLAN: But what you are saying for the future, there should be a structure so that people like Mr Ellis are able to sue and receive a verdict from a court? Isn't that right?

GEORGE PELL: For the future, yes.

PETER MCCLELLAN: Well I'm putting to you, if that's justice, as you see it, for the future, as you sit there now, why wouldn't it be just for the same response to have been made previously?

GEORGE PELL: Because that wasn't the law.

EMILY BOURKE: The hearing continues, and Cardinal Pell will return to the stand on Wednesday.

MARK COLVIN: Emily Bourke.