Brother Terence Heinrich, the MCC headmaster from 1983 to 1989, said the parents of a student, identified at the current Royal Commission into Institutional Responses to Child Sex Abuse hearing in Canberra as ACK, had come to him "in 1985 or 1986" and accused Chute of groping their son at a school film night.

He agreed with counsel assisting the royal commission, Simeon Beckett, he handled the complaint badly and it would have saved a lot of time and trouble if it had been referred to the police.

“In those days it wasn’t the way we went about dealing [with] those sorts of things,” the 68-year-old said.

“The simple fact is we tried to manage them privately, internally. That was the way of it. I would [hardly] have ventured into talking to police about something as intimate as concerning a brother.”

Brother Heinrich, who now works as an educational consultant in Cambodia, admitted originally making the comment to an insurance investigator in or about 2008 after multiple incidents of sexual abuse by Chute had come to light.

“I’m not sure what I said there really represents my thinking about this, even though I said it,” he told the royal commission.

Brother Heinrich had earlier said he had not been aware of sexual assaults committed against at least eight separate boys during his tenure as MCC headmaster. He also said he had never been briefed by his superiors in the order on Chute’s long history of predatory sexual activity against students that dated back to 1959.

This included a "canonical warning" made to Chute in July 1969 after he admitted sexually abusing a boy while the principal of St Joseph's School in Lismore in 1967.

Chute pleaded guilty in 2008 to 19 counts of sexual abuse against six former MCC students and the Marist Brothers, through their insurers, have paid 38 of his victims a total of $6.84 million in compensation.

Brother Heinrich, who testified in person and not by video link, said if his superiors had informed him of Chute's history he would probably have managed him very differently.

"[Such knowledge] would have engendered caution, suspicion [and] greater supervision perhaps," he said. "I am not altogether sure I would have been comfortable with that [Chute's past record]. I hope I would have registered a strong concern."

He admitted Chute had been given a great deal of autonomy within the school.

Asked if he would have gone so far as to try and have Chute removed, he said that wasn't how things were done at the time. It was the Provincial (the head of the order) who determined where teachers were sent. Headmasters and principals played the hands they were dealt.

"How can it be the case that such a large number boys could be abused and you, as the headmaster, were not aware of it?" Mr Beckett asked.

"I can't explain why, but there was never any report made to me, any complaint made to me, during that time," he replied in apparent contradiction of the accusation that Chute had groped ACK in 1986.

Brother Heinrich said when he had confronted Chute over that allegation the brother, who was more than 12 years his senior, had laughed the matter off.

"He said it was a misunderstanding; nothing wrong had happened. The implication was this had been in the dark, there was some movement, some fumbling, and this [the touching] had happened but that nothing was intended by it. One of my shortcomings was that I did not ask questions in my meeting with the parents. I did not have exact details."

Brother Heinrich has also conceded he may have spoken to teacher John Doyle about another allegation of sexual abuse against Chute in the same year despite initially denying this ever happened.

At issue is a claim by former student Damian De Marco that he told Mr Doyle in 1986 he had been abused by Chute in 1981 and that Mr Doyle had taken his concerns to Brother Heinrich who then told Mr Doyle nothing would be done.

Brother Heinrich returns to the stand on Friday morning.