A former children's nursery boss has told the Royal Court she was "shocked" to be asked to pay back around 60% of the £2.6m she made from selling her Castle Quay business following claims from the purchaser that they hadn't been warned about staff regulations.
Dawn McLachlan, who is fighting against returning £1.6m, sold Organic Kids Castle Quay and St. Lawrence for £5.125m to Busy Bees in 2019.
She is fighting against returning £1.6m from the Castle Quay sale and gave evidence on the second day of a hearing in the Royal Court yesterday.
The court heard that Busy Bees had not been made aware that there was a cap on increasing the number of children at the Castle Quay nursery beyond 46. Two extra qualified staff members had to be recruited before more children could be admitted.
Under a voluntary agreement, nursery managers working for Organic Kids' Castle Quay premises also checked they had the correct staff levels with the government's Children and Early Years Service, but Busy Bees was unaware of this information.
Answering questions from Advocate Olaf Blakeley, who is representing her, Mrs McLachlan said of the sum she was told to pay back: "I was shocked. All they had to do was phone up CEYS. It was just unbelievable and upsetting when I heard."
She also said the accounts showed that at the time of the sale the nursery had the equivalent of 45 full-time children attending.
Questioned by Commissioner Sir William Bailhache, presiding, she said: "I never promised Busy Bees a certain number of children."
She added: "Just getting two new members of staff wouldn’t have taken that long. It would be a couple of months, a month."
A legal expert had assessed the amount of money Mrs McLachlan should pay back, and Advocate Blakeley said that under UK law they would be unable
to challenge the expert’s judgment.
But he added: "This court doesn’t have to follow UK law slavishly. There is a lot to be said for the court to adopt a different approach.
"If a legal expert is wrong, then it cannot be fair."
However, Advocate Stephen Alexander, representing Busy Bees, argued that there were other issues with the nursery that had led to the ruling that Mrs McLachlan should repay £1.6 million.
He said: "There was a difference between what was promised and that which existed."
Advocate Alexander added that the sum represented "a reasonable assessment of loss" and asked: "Was the legal expert being unreasonable or acting in bad faith? Categorically no."
A decision on the appeal is due to be made in the coming weeks. Jurats Charles Blampied and Robert Christensen were sitting.
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