The man, who asked not to be named to protect his son, does not have a criminal record.
The Office of the Privacy Commissioner ruled the police breached two principles of the Privacy Act.
Given the "acrimonious relationship" between the two men, Assistant Privacy Commissioner Mike Flahive said police failed to take reasonable steps to ensure the security of the personal information.
In a second breach, Mr Flahive wrote in his decision, Mr Beatson used the information for a purpose it was not intended for.
"It is my view that you have suffered harm of this type based on the fact that Senior Constable Beatson has used his privileged position within police to access your NIA records primarily to promote his interests over yours," Mr Flahive told the complainant.
He referred the case to the Director of Human Rights Proceedings, former High Court judge Robert Hesketh, who settled the complaint with the police last week.
The police agreed to pay the man $3500 for emotional harm with $1232 more towards his legal bill. He will receive a written apology.
In return, Mr Hesketh agreed not to bring any court proceedings against the police.
A complaint was made to the Independent Police Conduct Authority, which stated that Mr Beatson's actions were "unjustified and undesirable" and amounted to serious misconduct.
But it said "employment matters involving police officers is a matter entirely for the police, not this authority".
The man first laid a complaint with the Waitemata police about the NIA leaks in August 2007.
However, the matter was not investigated until January 2009, after he complained to the Privacy Commissioner and the Independent Police Conduct Authority.
Although the police hierarchy confirmed the unauthorised checks, they would not reveal what disciplinary action had been taken against Mr Beatson.
Superintendent Bill Searle, the Waitemata district commander, said the internal investigation was thorough and was checked by external parties as regards the circumstances and facts.
"Strong disciplinary action has been taken - short of dismissal."
But he said details of the outcome remained confidential between police and the individual in accordance with employment law. Mr Searle said the security of personal information held by the police was "paramount".
He said use of the NIA was subject to random auditing every month and the rules governing its use were clearly laid out in police instructions.
"Any allegation of inappropriate accessing of personal information on police systems is taken extremely seriously, and is investigated in accordance with the police code of conduct."
The complainant said that although he was pleased with the outcome, "it has taken two and a half years and lot of taxpayers' money to get the police to finally acknowledge fault and apologise".
He said inappropriate use of the NIA database by police officers would continue unless the breaches were treated as criminal offences.
The same day as the Human Rights Proceedings settlement on March 22, a police worker who used a colleague's computer log-on to leak confidential information to a target of a drugs investigation was sentenced to four months' community detention.
Motorway support officer Darren Ian Hodgetts, 34, pleaded guilty to accessing the computer system for a dishonest purpose and was one of two non-sworn staff arrested for unauthorised NIA checks in Operation Ark.
