The complainant was allegedly abused by notorious abuser Edward Dowlan, a member of the Congregation of Christian Brothers, when he studied at the Cathedral College in East Melbourne.
The victim argued that Pell, who was the episcopal vicar for education for the diocese of Ballarat in the state of Victoria between 1973 and 1984, knew of Dowlan's abuse, Efe news reported.
Instead of taking action, Pell just moved the accused from a school to school without doing anything to protect the victims, local news agency AAP reported.
Dowlan, who is still in prison, was jailed for the first time in the 1990s for sexually abusing a number of children between 1971 and 1988 and continued to be part of the Congregation until 2008.
Three years later, he changed his name to Ted Bales to distance himself from previous offences.
The civil suit is set to be heard by a jury in 2020 if the two parties fail to reach a settlement during mediation.
The lawsuit against Pell, who is facing a number of judicial proceedings, also implicates the Bishop of Ballarat Paul Bird, Archbishop of Melbourne Peter Comensoli and the Catholic Education Commission.
The Cardinal, who had risen to the rank of the Vatican's number three and its chief financial officer, is awaiting the decision on his appeal against the prison sentence on five charges for abusing two 13-year-old choirboys at St. Patrick's Cathedral in 1996.
The court reserved its judgment in the case on Thursday.
( With inputs from IANS )