FactScenario4-CompensationforBusinessLosses

Frank Rizzoli is a famous chef.He has a restaurant in Toorak, an exclusive inner suburb ofMelbourneclose to theMelbourne CBD.

Over the past couple of years, business conditions have been difficult in thehospitality/entertainmentindustry.

Recently, Frank has been talking to his best friend Alberto, who is a well-knownentertainment promoter, that after 30 years of friendship they should collaborate on anexcitingnewproject.

Frank and Alberto agreed that every Saturday night, during the evening dinner service atFrank's restaurant, Alberto would arrange for a famous entertainer to perform for the dinnerpatrons.This arrangement worked well for six months, and famous entertainers such asBruce Springsteen, Jimmy Barnes, Michael Buble and Elton John performed at Frank'srestaurant.Frank's restaurant was very profitable and getting favourable reviews in themedia.

Just as things were going well, Alberto was called away to the USA on urgent business andleft the booking of entertainers to his assistant, Louie.Frank's mother became seriously illandFrank had to travel interstate tohelp her.

Before Alberto left for the USA he told Louie to book someone 'famous' each week forFrank's restaurant.Louie's connections in the entertainment industry were not as extensiveas Alberto's.Louie started booking local entertainers for Frank's restaurant that he foundfrom walking around the local pubs in Melbourne.The standard of entertainment at Frank'srestaurant plummeted.Frank's profits from his restaurant business had reducedsignificantly.Frank returned to his restaurant one Saturday night to find his dinner patronsbeingentertained by burlesquedancers.Frankwas horrified.

FranksuedAlbertofor$1minlostprofits.

Frank's problems with his restaurant were reported in the media.Alberto appeared at atelevised press conference, and when asked about the media reports he responded bysaying:"Who cares about Frank's restaurant.The food is rubbish anyway.I wouldn't eatthere".Frank closed his restaurant and immediately lodged a further claim against Alberto,seeking$2min damagesfor defamationcausing loss ofreputation.

Alberto could not afford to go to Court.It took six months for Alberto to settle the claims.On1 June 2023 Frank received a compensation payment of $1.5million from Alberto insettlement of both claims in full.At the same time, Frank opened a new restaurant at a newlocation on the Mornington Peninsula.His wife Melita, who was a famous TV personality,managedthebusiness.Businessatthenewrestaurantimprovedquicklyandconsiderably.