Hi both. Sorry to hear about this - you have my empathy.
I'm no expert but have been on the receiving end of a very similar situation. One thing is certain, you have give the guy the chance to put things right with the sports exhaust. I'm guessing that you've probably already done this (maybe more than once?) and it hasn't worked out. Things have then deteriorated between you and the supplier, you used him in good faith as he was offering his services to you as a expert in this field (ie he's a mechanic and not a carpenter) etc....etc....etc. He's this.......you're that...etc...
Assuming that you have the old exhaust in tact, then yes, he should be able to put you back to where you started - but I doubt that the old exhaust is still around(?).
For what it's worth I would take his offer and try to calm any stormy waters ASAP - after all he's going to be the one working on you car. In my experience there's definitely nothing to be gained in trading blows or letting the trader know that you're on forums, etc. This just winds people up.
And whatever you do avoid going to any form of court over it. It's just not worth it. My wife and I did over what amounted to a job on a classic car that we own that my 5 year old nephew could have done a better job on. Even though the judge himself admitted that the work was poor we still ended up covering half the costs, going through a massive load of stress and then had to find another supplier to sort out all the cr*p that we'd been left with in the end.
The outcome was, loads of unnecessary stress and arguments, time off work and a vehicle that we never quite regarded in the same light again.
I wish I'd just swallowed my pride (and anger) in the first place and tried to negotiate more.