I have created a UI Rule which is working properly. However, I have not been able to figure out how I set permissions so that a system administrator is not prevented from making a change i.e. overriding the rule. At present the sys admin cannot make the change & is affected by the rule.
You do not hide fields using UI rules; you hide fields either in the role definition, or in the form.
In this case, you should hide the field in the role definition. Open each role you have defined click on the item where you have defined the UI rule. Click on the advanced button. In the first tab, you will see a list of all the fields for that item. Highlight the field that corresponds to the boolean you are using for the UI rule, then click on the Hide button on the right. Doing this will hide this field everywhere for the role (forms, views, etc).