In act 3 of Romeo and Juliet, Romeo and his friends happen to run into Tybalt in a public place in Verona. Tybalt is the hot-tempered nephew of Lady Capulet. As a result of their bad blood, Tybalt, an excellent swordsman, insults Romeo and challenges him to a duel. Since Tybalt is Juliet’s cousin, Romeo refuses the challenge. Romeo’s friend Mercutio does not understand his reluctance to fight and decides to fight Tybalt in Romeo’s place. When Romeo attempts to stop the duel, he distracts Mercutio who is then fatally stabbed. Now, Romeo feels honor-bound to avenge his friend’s death and continues the fight, killing Tybalt.

Romeo is banished by the Prince for the killing. Before his exile, he secretly marries Juliet and prepares to leave for Mantua. However, he cannot bear to part from Juliet and considers taking his own life. It is at this point in the drama that Friar Laurence intercedes:

I'll give thee armour to keep off that word:
Adversity's sweet milk, philosophy,
To comfort thee, though thou art banished.

When the Nurse, Juliet’s gossiping nanny, enters the scene, she tells Romeo that Juliet is distraught:

O, she says nothing, sir, but weeps and weeps;
And now falls on her bed; and then starts up,
And Tybalt calls; and then on Romeo cries,
And then down falls again.

As Romeo draws his sword in thoughts of suicide, the Friar scolds him:

Hold thy desperate hand:
Art thou a man? thy form cries out thou art:
Thy tears are womanish

Friar Laurence offers him advice and three reasons why he should be happy, not sad. First, he tells him not to be ignorant and destroy his love for Juliet, for she is still alive:

Thy dear love sworn but hollow perjury,
Killing that love which thou hast vow'd to cherish ...

Like powder in a skitless soldier's flask,
Is set afire by thine own ignorance,
And thou dismember'd with thine own defence.
What, rouse thee, man! thy Juliet is alive

Second, the Friar reminds Romeo that Tybalt set out to kill him and failed:

There art thou happy: Tybalt would kill thee,
But thou slew'st Tybalt; there are thou happy too

Third, the Friar urges Romeo to proceed to his exile in Mantua. He tells him that he should be happy because normally the killing of Tybalt would have carried a penalty of death, but he was spared. He should bide his time until he can find a way to set things right, get the Prince to pardon him, and renew his marriage with Juliet:

The law that threaten'd death becomes thy friend
And turns it to exile; there art thou happy:
A pack of blessings lights up upon thy back;
Happiness courts thee in her best array ...

For then thou canst not pass to Mantua;
Where thou shalt live, till we can find a time
To blaze your marriage, reconcile your friends,
Beg pardon of the prince, and call thee back
With twenty hundred thousand times more joy
Than thou went'st forth in lamentation.

With the three reasons provided by Friar Laurence, he emphasized that Romeo should be happy, not suicidal, because Juliet is alive and his wife; he is alive, having defeated Tybalt; and, he was fortunate to have been banished rather than executed, and he still has an opportunity to return to Verona, request a pardon from the Prince, and restore his relationship with his wife.

In act 3, scene 3 of Romeo and Juliet, Romeo has just drawn his sword to commit some act of violence against himself when Friar Laurence scolds him in a long speech. He begins by telling Romeo to pull himself together and behave like a man but then gives three reasons why he believes Romeo should be happy, rhetorically repeating the phrase "there art thou happy."

What, rouse thee, man! thy Juliet is alive,
For whose dear sake thou wast but lately dead;
There art thou happy: Tybalt would kill thee,
But thou slew'st Tybalt; there are thou happy too:
The law that threaten'd death becomes thy friend
And turns it to exile; there art thou happy.

The three reasons to be cheerful, therefore, are as follows:

1. Juliet is alive and well.

2. Tybalt, who had tried to kill Romeo, failed in that endeavor and was killed by Romeo instead. A lethal sword fight with a dangerous rival, therefore, has turned out as well for Romeo as he could possibly have expected.

3. Romeo has committed murder during the course of a duel at a particularly dangerous time, when the Prince has vowed to crack down on such street-fighting. The Capulets, quite naturally, have called for Romeo to be executed. However, the Prince, presumably swayed by Benvolio's testimony and by the fact that Tybalt had just killed Mercutio, whom Romeo was avenging, has decided not to pass sentence of death upon Romeo but merely to banish him from the city. This is an edict that may be reversed at any time, allowing the lovers to be reunited.

I think that you are talking about what happens in Act III, Scene 3.  To me, Friar Lawrence is not giving advice to make Romeo happy.  I'd say he is scolding Romeo and telling him "you really ought to be happy and grateful because things are so much better than they could be, you little..."

Here are three reasons why he says Romeo ought to be happy:

• He still has Juliet.
• He is alive even though it seemed likely that Tybalt would kill him.
• The Prince is only banishing him, not executing him like he might have.

In Act III, scene iii of Romeo and Juliet, Romeo is really whiny: he cries and threatens suicide after the Prince has banished him from Verona, where Juliet and his family reside.  This scene foreshadows his suicide later in Act V.  Here, Friar Lawrence gives at least three reasons why Romeo must not commit suicide.  Instead, he should be "happy":

Thy Juliet is alive,
For whose dear sake thou wast but lately dead;
There art thou happy: Tybalt would kill thee,
But thou slew'st Tybalt; there are thou happy too:
The law that threaten'd death becomes thy friend
And turns it to exile; there art thou happy:
A pack of blessings lights up upon thy back;
Happiness courts thee in her best array;
But, like a misbehaved and sullen wench,
Thou pout'st upon thy fortune and thy love:

So, Romeo should be happy...

1. to still have Juliet for his wife
2. to survive the duel with Tybalt
3. to not be put to death (as was the Prince's earlier decree); instead, the Prince only banishes Romeo from Verona