I've come accross this scenario a few times. In the 9 years I have been teaching, I have had two of my bosses at work, a collegue, two close friends, a peer, and two girlfriends train under me. In addition, our head instructor is my father. It's hard to get them to seperate the personal life and the dojo, and for that reason, I make it clear as soon as they intend training with us, that in the dojo, they will get treated like everyone else, then when we walk out, it's different, and that's exactly the way my father and I am. In this scenario, yes you should have made more of an effort to make that clear, but I think the main blame was on the student. He made a deliberate effort to be a pain in the butt and that is not acceptable. Remember, in there, regardless of if you are the head instructor or just helping out, you are the boss. They follow the rules or cop the consequences.