As Alan M said,
a radar controller shouldn't instruct an aircraft to descend below the appropriate sector MSA, just incase that the IFR aircraft doesn't end up in VMC (in this case clear of cloud, in sight of the surface and a forward vis of 5Km) The subsequent VFR cx, would have been "IfR Flight plan cancelled time xxxx , continue VFR not above xxxft via (route) " or along those lines. to say that you haven't time for an IFR transit, implies that passing the buck to go VFR would actually make the controller busier with all the relevant traffic info that would then result. Surely 2 or 3 hdgs would have at least kept him out the way, or even a change of level, to keep him above the missed app level?
Unfortunately, you cannot disprove that the transiting aircraft was in VMC, the rule book also states you cannot refuse a VFR TRANSIT clearance even if the reported met vis is below 5KM. the clearance can only be refused should the aircraft be taking off or landing at an aerodrome within class D.