Seller Pulled out of Auction After I Paid

Trade Me is now the Wild West & unfortunately members are now left to their own devices & contend as best they can. I've had a similar experience before, when the seller wasn't happy with the price they got after starting at $1 reserve. Trade Me won't step in, they'll just encourage you to leave feedback of your experience & if you've a good boy or girl, they'll even tidy up the retaliatory negative feedback you receive in return. Anything goes out there apparently.

The refund doesn't come "from Trade Me" The refund is initiated by the seller. So they've given you some wrong/bad advice there.

If they haven't refunded you yet, you should open a Dispute for this item. 

It's not really about the refund though is it. It's more about getting your time wasted due to the seller backing out, as they were not happy with the price realized. 

I advise the buyer to open a dispute with TM and forward correspondence to them between buyer and seller