Is it how or how not to respond to a negative review?

I loved reading that, and can totally understand the owners perspective!

Here they are, putting in all the hours on the earth to run their business, and with all the futurity some fingers on a keyboard can bring, someone slates their hard work.

It's really tough to keep calm!

But keep calm you must.

There's nothing wrong with explaining your side to correct the situation, or making a statement, but in all consumer resolution it should be:

Apologise - Either for not making it clear enough at the time
Explain - Why the situation occured
Resolve - Offer them something small and cheap as a freebie on their return.

What is being said inside your head should often stay there!

Every restaurant has the right not to serve someone, even lawyers. Companies need to be able to stand up for what they believe without fear of a negative review or as in this case has the right to full reply. 

Of course this reply needs to be measured and factual (as was this one in the main). I actually love the response but it does go that bit too far and if it wasnt for the posted mono-log it actually would read even better.

As long as these kind of replies are limited and not to every review then personally i think its fine.

Good for them I say, you cant threaten and leave a bad review without the company having the right for a fair comeback and they certainly did that, and I think explained the situation in a way anybody could grasp and sympathy would not be with a lawyer!