The COC has some language around it, but without a lot of detail. "If a Passenger is removed from a seat for which a fee has been paid, and the Passenger is not re-accommodated in the same class of seat or a seat of equal or greater value, or if a Passenger is downgraded from a class of service and is not re-accommodated in a seat of an equal or greater class of service for which a fee has been paid, the Passenger may be eligible for a refund in accordance with Rule 17."

You can argue this one two ways...using the first part, the customer paid a fee for that seat. He paid more than Saver which would have given him an ordinary seat. Or, you can argue the latter, in which case there's no provision for a partial refund, and he's simply due a refund (there's only one price paid, the ticket price, so full refund it is!). It doesn't say full, but it doesn't say partial, so interpret away.

Bottom line, the contract is designed to protect the company (e.g., you see the language "may be eligible for a refund"), and there's no point in going tit for tat on this stuff when a basic consumer principle has been violated. Customer paid for X and got Y. If they want to keep the customer's money (or a part of it), they need to work it out to his satisfaction.

Part of the way you win these things is by not going down the other side's rabbit holes (the contract in this case, or the supervisor's ridiculous $0 refund claim) unless it actually helps you. They can throw 50 pages of lawyer-reviewed content at you, but there's only one fact that matters. They took his money in exchange for a service that they never provided, and they need to fix it. I hope they will, but if they can't, dispute away and DOT them to compel them to fix it.