Typically if your canceling before any flight segments are flown you cannot make changes to nonrefundable tickets but rather they must be exchanged for new tickets, which is what your brother did but its odd they didn't let him apply the value (after change fee, typically $250 for intl tickets) towards the new tickets. I have to guess that being as the original tickets it sounds were booked with rather short notice, and 10K for 6 pax would back that up, I can't imagine they were in a fare basis that had no value if changed. Did they buy them through some opaque ticking agent (hotwire, priceline etc)? That would be the only thing I could think of that would probably have that type of restriction.