Now Raymond Splatt, 54, has been stabbed to death in a Melbourne psychiatric facility.

Mr Splatt, formerly of Wallacedale, has been named as one of two patients at the Thomas Embley Hospital in Melbourne's inner east to have been killed, allegedly at the hands of one of his fellow residents and former fishing partner.

Mr Splatt was allegedly attacked by his roommate Peko Lakovski, 49, about 11pm with a large carving knife, police have told the Melbourne Magistrates Court.

A close relative of Mr Splatt's, who lives in Portland, said he could hardly believe it when police told him the news at 5am on Thursday.

"Everything was just coasting along," the relative, who asked not to be identified, said of Mr Splatt's time in the low security Jardine unit at Thomas Embley.

"We thought he was in a reasonably safe environment where he couldn't harm anybody and where, you would have thought, he wouldn't get harmed himself.

"And obviously, we were wrong."

The relative last spoke to Mr Splatt about three months ago but rarely visited him.

Police told the court the wounds to Mr Splatt's upper body were fatal.

Moments later, Mr Lakovski is alleged to have moved next door where he stabbed Paul Notas, who was in bed, prompting Mr Notas to flee into another room where he was stabbed again and died a short time later.

The incident has prompted a major review of security at the 118-bed facility and some outcry that violent psychiatric patients are routinely allowed out on day-passes in the local neighbourhood.

Mr Splatt was charged with the murder of his mother, Alberta Lillian Splatt, 60, who was found in a shallow grave in the garden of her home in School Road in January 1984.

Police alleged he had struck her on the back of the head with a shovel.

He was later found not guilty on grounds of insanity and was kept in custody at Pentridge before being transferred to the Rosanna Forensic Psychiatric Centre in 1991.