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What is the best way to tell them off when they do something naughty.

Recently they have been biting especially my hands and the other day one of them bit my daughter and it hurt her, so was wondering how do you tell them from right and wrong.

Huh, a difficult question. Did you observe any special reason for them to bite? Perhaps if they are hungry or they want your attention? Or are they just playing? Kakarikis explore everything with their beak; perhaps they try to explore you.
When my chicks started to bite, I sometimes snarled at them like Kakarikis do when they don't like something. If they don't react, try to shoo them away - but gently!

This is a typical misbehaviour shown from handbread kakariki, mainly the male ones. The reason for that is that they don't have any natural fear against us.
Do both kakariki show this behaviour against your family, male and female?

Our Rocky is a male handbread, too, he came to us because of this biting. The stronger the natural bonding to his hen Tina grew, the less he shows his misbehaviour. Only in strange situation he tries to bite us anymore.
My wifes feet are the point he attacts the most, if she's wearing hard shoes, he has no fun and doesn't start the biting attac.

It is only the male that bites and he tends to bite me more than the daughters and the wife.

They are still only young birds so he may stop in time hopefully.

Regards Michael.