Flight to Ferry Downgrade Compensation

I recently had a flight booked from the Isles of Scilly to Exeter.  This was cancelled with 2 weeks notice, with the option given of cancelling completely (being stranded with no accommodation on Scilly) or taking the ferry back to Penzance and then a coach to Exeter.  
The flight was originally at 10:20am and the ferry was 16:30, meaning we didn't get back to Exeter until 23:00, so had to book a hotel, before travelling home.
The flight cost £241 and the ferry £72.50. Scilly travel are saying that I am only due a refund of 1/3 of the cost of the flight as two weeks notice was given and the ferry is considered a downgrade.  
Note that there was no option to cancel the flight and then book the ferry separately as the company had removed the option of booking the ferry that day from their website.
I can't find any information online regarding flight to ferry downgrades, as opposed to just flight downgrades.  
Can anyone help with regards to whether the 1/3 refund is applicable and whether it's possible to get a bigger refund as this seems unreasonable.  Thank you
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