Raina Mersane Ina Thaiday will not stand trial after being deemed of “unsound mind”. PHOTO: LYNDELL Raina Mersane Ina Thaiday will not stand trial after being deemed of "unsound mind".

SYDNEY (AFP) – An Australian mother who killed seven of her children and a niece in a brutal case that shocked the country will not stand trial after being deemed of “unsound mind”, a court has ruled.

The bodies of the youngsters, aged between two and 14, were found stabbed to death at a home in the northern city of Cairns in December 2014.

Raina Mersane Ina Thaiday, also known as Mersane Warria, was charged with murdering the four girls and four boys after being found by police at the scene of the crime with 35 self-inflicted stab wounds.

In a ruling reached last month but only made public Thursday, the Queensland Mental Health Court found she could not be held criminally responsible as she had suffered a psychotic episode from an undiagnosed mental condition.

“At the time of the killing, Mrs Thaiday was suffering from a mental illness, paranoid schizophrenia, and that she had no capacity to know what she was doing was wrong,” said the court findings of her psychiatrist.

“In fact, to her way of thinking at that time, what she was doing was the best thing she could do for her children; she was trying to save them.”

Under Queensland state law if a person is found to be of unsound mind at the time of an offence, criminal proceedings against them are discontinued and they are considered unfit to stand trial.

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Thaiday, 40, is being held in a high-security mental health institute and it is unclear if she will ever be released.

Court records revealed her condition had been getting worse in the lead up to the killings, to the point where she believed there were evil spirits in her home.

“I am the chosen one. I have the power to kill people and to curse people. You hurt my kids, I hurt them first. You stab my kids, I stab them first. If you kill them, I will kill them,” she is alleged to have been ranting in the street on the night of the murder.

The house where the killings took place was demolished in 2015 with a park installed as a memorial to the slain children.

The murders stunned Australia, which was still reeling from a dramatic siege in a central Sydney cafe just days earlier, which left two hostages and a gunman dead, and prompted widespread shock and anger.