Former Melbourne archbishop Frank Little and his advisers completely failed to deal with pedophile priests, his former second-in-charge admits.
Former vicar-general Bishop Peter Connors and Archbishop Little both knew about child sex abuse complaints against Fr Wilfred "Bill" Baker as early as 1978, an inquiry has heard.
"There was a complete failure of the archbishop and his advisers to deal with these issues," Bishop Connors told the child abuse royal commission.
Commission chair Justice Peter McClellan said the failings were often said to be motivated by a desire to protect the church.
Bishop Connors said that allegation was justified and agreed with Justice McClellan that it was a fundamentally damning allegation of the church.
The archbishop and vicar-general both knew in 1978 of a child sex abuse complaint against Baker, who was moved between a number of parishes, and about another complaint in 1992, and nothing was done.
Senior counsel assisting the commission Gail Furness SC said there were many opportunities for senior church figures to say "enough is enough".
"I can't really excuse myself for failing to put the pressure on the archbishop to do something with this man," Bishop Connors said.
The commission has heard Bishop Connors told a school principal in 1993 "research tells us once a pedophile always a pedophile", referring to Baker.
Bishop Connors said by 1993 all bishops were well informed from discussions at a bishops conference that pedophiles could not be cured.
Current Melbourne Archbishop Denis Hart has told the inquiry the church failed to recognise it had pedophiles in its midst.
"What is now apparent to me is that there was knowledge of their existence and that we failed to act to have them withdrawn from the ministry and referred to the police," he said this week.
The commission also heard police wrongly decided a priest had committed no crime when he indecently assaulted a 10-year-old girl during confession.
Victoria Police Assistant Commissioner Stephen Fontana said he disagreed with the 1990 conclusion there were "nil offences disclosed".
"I'm of the view that there certainly was an indecent assault that was committed and it should have proceeded further," he said.
Julie Stewart has told the inquiry Doveton parish priest Fr Peter Searson indecently assaulted her during confession in 1985.
The 1990 police report said: "All Searson has done is sit the child on his knee and get the child to kiss him on the cheek.
"Stewart stated that when she sat on his knee he dragged her up and onto his lap where she felt his erect penis rubbing on her back."
Ms Stewart has given evidence that when she told an officer she had also been abused by someone else as a child, he said: "Oh my God, what were you wearing, a neon sign above your head saying 'come and get me'?"
Mr Fontana said the probationary constable was mortified when he heard that and did not believe he would have said it, but apologised if he had said anything that upset Ms Stewart.
Searson has also been accused of telling a woman who wanted to convert to Catholicism to get married that she had to first sleep with him, while he was chaplain at the Villa Maria Society for the Blind in 1974.
"Fr Searson, who was given that task of attending to her baptism and conversion, told her that she needed to have sexual intercourse with him, which she did," counsel assisting the commission Stephen Free said on Wednesday.
