They earlier admitted to being in a sexual relationship since the woman was 16-years-old. It had continued despite them being sentenced in 2012.
In court on Wednesday the judge sentenced the 37-year-old man to six months' community detention and two years of intensive supervision. His 23-year-old daughter is subject to judicial monitoring.
READ MORE: Dunedin father and daughter plead guilty
Phillips also issued a strict, two-year non-association order, while the woman must not leave Dunedin and the man must not come within 100 kilometres of the city. Both must undergo counselling.
The man and his daughter were granted permanent name suppression to protect their school-aged child.
"Neither of them deserve it at all," the judge told the defendants, who each pleaded guilty to a charge of incest in September.
DUO HAD TWO CHILDREN
The court heard the pair became a couple when the woman was 16 and the four-year sexual relationship resulted in two children – a daughter and then a son who died from sudden infant death syndrome.
Crown prosecutor Craig Power said the man showed little remorse over his offending and remained a risk, while the woman was in need of psychological counselling.
The woman's lawyer, Anne Stevens, said her client had been abused and was vulnerable as she had never had any love or support until she entered a relationship with her father, with whom she had been estranged.
Phillips said reports provided to the court stated the man justified his offending by being a "victim of circumstance".
Court documents showed that when the man was 14 years old, he had a sexual relationship with his 30-year-old foster mother, resulting in the birth of his daughter.
He had little contact with his daughter until she was 16.
His lawyer, Andrew Dawson, said his client was living in a different South Island town and since the relationship ended was "in a different space".
"He knows … that things need to change."
The man saw himself "as a victim".
The judge said sentencing had been "an extremely difficult exercise".
He was concerned by the actions of her father, but said the daughter deserved "one final opportunity".
Phillips told the man: "You need to be a master, the controller of what is now put in place, you need to be disciplined and solid in regards to your non-association with your co-defendant … it has to end totally now."
SECOND INCEST CHARGES
In August 2012, the pair pleaded guilty to incest and received community-based sentences.
The sentencing judge noted the woman had acknowledged the relationship could not continue, however her father was unremorseful and was deemed to have a high risk of re-offending.
The judge stopped short of sentencing the pair to imprisonment, but both were given a warning that if they re-offended in a similar manner that outcome was inevitable.
The woman gave birth to another child in June 2013.
It was when police were called to a domestic dispute that they suspected the duo were again in a relationship.
The woman later told officers she was in a relationship with her father and their family did not approve.
Three months later the baby was found dead at the mother's home in unexplained, but not suspicious, circumstances.
The death was later confirmed to be sudden infant death syndrome.
The father formally identified the body and signed a deceased person identification form that said the baby's relationship to him was "son (non maternal)".
Police asked the pathologist conducting the post-mortem examination to obtain a blood sample from the baby for DNA testing.
Analysis of that sample supported the conclusion that the pair were the baby's biological parents.
The second incest charges against the pair were filed in the Dunedin District Court in May 2014, with both electing trial by judge alone.
The DNA evidence was ruled admissible, but the couple were granted leave to appeal to the High Court.
A High Court decision found the blood sample was admissible as "to exclude the evidence would be disproportionate to the impropriety".
The father argued the taking of the sample without consent was a cultural affront.
A Court of Appeal decision in April 2016 deemed the sample admissible, noting the pair had consented to the post-mortem examination.
"Drawing all these threads together we consider that exclusion of the impugned evidence would be disproportionate to the gravity of the breach," the decision said.