Even if the speaker has experienced such an event, the conversation is still about a hypothetical situation. The normal response for C would be to say.
No, I would never say that.
If speaker C wanted to elaborate and bring up specific cases, then the past tense could be used:
No, I would never say that. In fact, I have never said anything like that.
Note that the past tense is used there, but that I've omitted the speculative would. To keep it in would imply that the speaker is eager to correct the notion that he or she did say such a thing. If someone else had made an accusation one wished to deny, the following construction could be used:
I did not say that. I would never have said that.
Here the simple denial is supplemented by an elaboration on the speaker's normal usage patterns, emphasizing the speaker's customary and ongoing aversion to the kind of construction the other speaker had used.