HALIFAX, N.S. - Earl Shadbolt was reunited Tuesday with his beloved pooch, Willie, ending a dispute with a neighbour in a custody battle that raised the ire of animal lovers.

The 75-year-old Shadbolt left his small dog with a friend from church after his home in the Halifax-area suburb of Eastern Passage was damaged by a fire in April.

But when the retiree attempted to retrieve the dog from Laura Naugler about five months later, the two disagreed on appropriate payment.

However, Shadbolt and Naugler came to an agreement that saw Willie returned home.

As Willie squirmed and whimpered in his owner's arms, Shadbolt said he was simply glad the saga was over.

"Too much stress, too much stress," Shadbolt said of the effort to regain custody of the mixed-breed terrier with black ears and bright brown eyes.

"I think he'll fall right back into place again."

The story generated much attention last month, when an ad appeared in a local newspaper saying Willie would be auctioned off by Naugler under provisions of the province's Warehouseman's Lien Act - a law more often used by garage owners who sell cars when repair bills go unpaid.

That made the case a cause celebre among pet owners, who signed up by the hundreds onto a Facebook group called, "Give Earl Shadbolt his dog back!" Local newspapers were also deluged with impassioned letters carrying strong opinions on Willie's fate.

Naugler was unavailable for comment on Tuesday, but her lawyer, Blair MacKinnon, said his client had good motives.

He said Naugler never would have actually sold Willie off in a public auction.

"She did that to ... buy herself some time," he said.

"She was trying to see what could be done to protect the dog."

MacKinnon said she was worried that Shadbolt had difficulty caring for Willie.

He said his client also wanted to be paid $1,260 - the amount provided for by insurance - for care of the dog.

After Shadbolt agreed to pay the amount, he won custody.

MacKinnon said Tuesday's deal makes a Halifax animal welfare group, the Animal Rescue Coalition, guardians of the dog and allows the group to check in on Willie.

MacKinnon said that was the key provision for Naugler, adding that his client has donated the $1,260 to a Baptist church where the two had originally met and become friends.

Shadbolt said on top of the payment, he spent about $1,000 in legal fees.

He said he feels his neighbour treated him badly.

"It didn't work out because they fell in love with him," he said.

"Everyone falls in love with him."

Animal Rescue Coalition president Annette Armitage, who played a key role in brokering the deal, brought Willie home.

"He was well-taken care of," she said.

"He's a great dog."

She said she had no qualms about returning the dog to Shadbolt, noting that a trainer would be provided to assist him in helping Willie get reacquainted at home.

Armitage said she became involved after seeing the auction notice, saying that demonstrated the need for better laws to prevent animals from being treated purely as property.

"The main thing now is that Willie is back with his owner and we'll try to make the transition as easy as possible for them," she said.

Willie will have to readjust to living in the same house as Cleo, a cat who brooks no nonsense from the rambunctious canine.

The dog's master had prepared for his return, purchasing him two winter coats, putting out his bed and storing up on carrots, Willie's favourite snack.

"I'm just glad it's over," Shadbolt said.