"We are aware of the issue of managing a defendant who is deemed unfit to stand trial and where supervised detention or care or treatment orders are not considered appropriate."
Matthew Goodwin, Mr I's defence counsel, said it was unusual for a High Court judge to consider it necessary to send a judgment to policy makers.
"It suggests a high level of concern for the issue taken seriously and tackled with urgency," said Goodwin.
"It could be potentially perilous to put this on the backburner."
His client was deemed unfit to stand trial because of his dementia in August 2016, after two earlier trials were called off.
The first trial, in February 2015 was aborted after it was revealed Child Youth and Family failed to hand over 300 pages of documents to the police investigation.
A second trial was also aborted when Mr I suffered a stroke during the hearing.
Medical experts agreed Mr I suffered from worsening dementia which was unlikely to improve, as well as cardiovascular and respiratory problems and complications from diabetes.
To compound matters, he was diagnosed with profound "intellectual deficiencies" and poor verbal comprehension.
"His overall cognitive ability was scored in the extremely low 99th percentile," wrote Justice Moore.
After Mr I was deemed unfit to stand trial, he was assessed by a senior psychiatrist at the Mason Clinic, the secure facility at the Waitemata DHB for criminal offenders with serious mental health issues.
Dr Gavin Tan considered the risk of re-offending was low, so this meant Mr I could not be detained as a "special patient" or "special care recipient" under mental health and intellectual disability legislation.
Because of this, Justice Moore said the only available option under the law was to release Mr I into the public - without any supervision or monitoring.
"Given the extremely serious nature of his offending I formed the view that this course was simply unacceptable and that other avenues needed to be explored in order to ensure the protection of the public," wrote the High Court judge.
Goodwin suggested meeting with representatives from the Auckland DHB and forensic psychiatric services to make a plan for his future care.
Mr I was assessed three times by Dr Maree Todd, the lead geriatrician at the Auckland DHB, who then applied to the Family Court to become his "welfare guardian" under the Protection of Personal and Property Rights Act.
Under this arrangement, approved by Judge Lex de Jong, Mr I must permanently reside at the Auckland rest home - which cannot be named - which will monitor his medication and staff present during visits from children.
The residential home is aware of Mr I's background and staff are experienced in taking care of residents with criminal history.
Once the Family Court orders were in place, Justice Moore reluctantly released Mr I saying there are "obvious shortcomings to that somewhat unsatisfactory consequence in terms of this case".
He noted a similar case dealt with by Justice Graham Lang in April, where an elderly man who regularly sexually abused a young neighbour was released into the care of his family.
Justice Lang also expressed frustration he was unable to release a defendant subject to conditions.
"In other words, once released, there are no compulsive orders which the Court may make in relation to the ongoing monitoring of the defendant or the ability to recall the defendant in the event circumstances arise justifying that course," wrote Justice Moore.
Both High Court judges said this could be fixed easily by adding the words "upon such conditions as the Court may deem fit" to the relevant section of the law.
