did Hally make the correct decision, by chosing his father?

That ethical question doesn't have a "right" answer. It's up to the audience to decide how to feel. Certainly, Hally showed himself to have a nasty streak when he spits in Sam's face - after all, Sam is much more of a father to him than his own father ever was. But then again, it is his father, and he's family. The conflict Hally feels is understandable - his behavior in trying to reconcile the conflict, the cruelty it leads him to show Sam, speaks to the depth of pain that apartheid (and racism/hatred in general) causes for a child. How can he reconcile the fact that Sam is more of a father figure when Sam is black, a figure society tells him is inferior? Fugard's point is to illustrate the depths of self-hatred that are engendered by a world of prejudice.