A review of the incident by Capital and Coast District Health Board said in the days preceding the offending the man's parents had become concerned as he had stopped taking medication, was not sleeping well, and seemed "not right".
After being admitted to the respite house, he was checked on twice by support work staff before he left the house without telling anyone, climbed over the fence and headed down a pathway to a park, which lead to a suburban street and a nearby primary school.
It was on this route that he came across the father and his daughter, and the incident unfolded.
The report showed the NGO (Non-Governmental Organisation) team questioned the decision to place the man in crisis respite, based on the earlier events of the day.
But staff were reassured by the attending clinician that it was the appropriate decision.
"They also noted that the plan indicated the client understood they were not to leave the facility. However NGO staff also noted that clients enter crisis respite voluntarily and are free to come and go as they please."
Previous clinical notes showed the man acting on "perceived concerns of children at risk", which suggested he was acting on psychotic perceptions at the time.
Since the incident CCDHB have carried out investigations, interviews and community consultation and are looking to relocate the respite house to another area.
Pathways data show there are 170 people admitted to the Whitby facility each year.
The local community said they were concerned about the state of some clients, and they reported repeated instances of police and ambulance vehicles going to and from the site.
The review team considered the staffing at the Whitby respite house to be below a safe level, a view that was supported by increased police callouts to the facility over the past five years.
Improvements being made to the service include better information-sharing so Pathways staff are more informed about clients' needs, and having Crisis Resolution Service staff in Wellington Regional Hospital's ED to provide faster assessment and support for people in mental health distress.
Further improvements being worked on include a single electronic file of client information, ensuring respite services have better access to a trained mental health nurse for at least eight hours a day, and improved training and supervision for community mental health teams.
"We and Pathways took this incident seriously and recognise its impact on the child, client, families, neighbours and staff," said mental health, addictions and intellectual disability service general manager Nigel Fairley.
"The review found that some things could have been done better in the lead-up to the incident, and made recommendations to help us try to ensure such an incident doesn't happen again.
"Other recommendations are now either being scoped or implemented. We're also working to relocate the Whitby service as the current building is not physically suitable for some of the improvements - such as having higher numbers of clinical staff."
