The rule here in BC is called the "Slide or Avoid" rule and states, "if a play is being made, or is about to be made, it is MANDATORY for players of all age groups to slide or make an effort to avoid a collision at all bases and home plate. Failure to do either will result in an automatic out. The ball is dead and no runner may advance beyond the base that was legally acquired. An umpire will have the option of ejection if the incident warrants such a measure."
The rule was designed primarily to avoid catchers getting steamrolled at the plate, however the fact that it applies to ALL bases and that it states in part "...or a play is about to be made..." introduces some gray area into this rule. It sounds in your case like the runner should have been called out, but I guess the umps felt that the play could not have been made...or alternatively, if there was no collision, perhaps they felt he "avoided"? The rule becomes even more gray when a runner stealing second for example goes in standing up, does not slide, and there is close play...technically he should have slid and many a coach has argued this point based on the rule (some with success), even though from a traditional baseball sense, the runner WAS safe and it was at his own risk of not sliding to possibly be tagged out.
I'd also be interested in knowing who brought the rules on to the field. Generally if a COACH does this, many umpires will eject them from the game as I always understood that a coach can not bring a rule book on to the field...I am not sure if this is technically against the rules, but at least I think it is technically against the "umpire rules"...ie showing the umps up or something, and they will not be pleased!