Brisbane Archbishop Mark Coleridge told the commission that the Catholic Church had been hit by a "tsunami" of allegations.
In its first year, the commission fielded 13,500 calls and 5500 letters and emails. In addition to public hearings, commissioners held 1730 private sessions with alleged victims.
Although Catholic priests and institutions have featured heavily, allegations have also involved other churches and institutions ranging from the Scout Movement to Swimming Australia.
Davis is alleged to have committed the offence when he was a teacher at St Benedict's College, part of a monastery complex established by Spanish Benedictines at New Norcia, north of Perth, almost 170 years ago.
Born in Queensland, he was raised in Perth and served with the navy in the early 1960s, later teaching at St Benedictine's. Ordained in 1971, he served as chaplain on a number of navy ships and bases. In 1990 he joined the new Military Ordinariate ministering to the Defence Force, and became its bishop in 2003.
In a statement the Ordinariate said: "An allegation has been made to the police that in 1969 Bishop Max Davis abused a student at St Benedict's College in New Norcia.
"At that time - 45 years ago - the bishop was not ordained. The bishop emphatically denies the allegation and the charge will be defended."
"This is a distressing day," the chief executive of the Church's Truth Justice and Healing Council, Francis Sullivan, told the ABC. "It is the first time that a serving bishop has had to step aside because of police charges [but] it is important to remember that these are just allegations."
New Norcia has not previously featured in child sex abuse allegations.
But the commission heard disturbing allegations of rape, torture, beatings and forced labour at four Christian Brothers institutions in WA, involving mainly orphans or children forcibly removed from their parents. Many came from Britain.
The allegations mirrored similar disturbing revelations heard across Australia by the commission.