At the time the girl was only 13 and they soon formed a relationship, socialising together, Ms Kelly said. Her mother confronted them about the relationship, she said.
"He would seek out opportunities to be alone with the young girl. They were caught in bed together but he denied any wrongdoing."
In 2012, Knauf formed a relationship with an older woman and they were trying to have a baby together.
But last July the girl, then 14, had a son and Child, Youth and Family became involved.
Police successfully applied for a compulsory DNA order, which identified him as the father, she said.
"Both the girl and he denied he was the father. He then admitted they had fallen in love. The baby was to be a surrogate for [his partner]."
Convicting Knauf of the charge, Judge Mill served him with a first strike warning about the consequences of future sexual or violent offending.
If he is convicted of a second sexual or violent offence he will be jailed without parole.
If he commits one of the 40 other crimes listed against the three strikes warning, he will be jailed for the maximum term for that crime and serve it without parole.
Knauf was remanded on bail for a pre-sentence report and is due to be sentenced in Lower Hutt District Court on June 18.
