hi and to add insult to injury he left negative feedback on 8th may 2013 to justify he is making a legit claim and yes paypal appears to just give the purchaser their funds without any proof yet seller has to fight for his funds

You can almost certainly have that neg removed by lodging a Notice of Claim of Defamation.

http://pages.ebay.com.au/help/community/defam-form.html