Hi Van
Difficult one especially if you have to continue to work with the person involved.
I think my response would have been to put it in writing the more these people get away with this type of behaviour the more it encourages others to act in the same way. It can become a culture on a unit with everybody turning the other way.
I would also suggest that there may be POVA issues here and I believe it is up to us to reinforce good practice wherever we work.
Personally I always think that if my children etc were there, how would I expect them to be treated. This always guides me into what action to take. But there again I am not such a nice laid back person as you.