Whose dog is it?

[Catherine]

I can understand that the woman wants her dog back. She has  kept looking for him all these years. However, the dog has lived with a loving family and has grown up with the children. This family is his whole life. It would be distressing to take him from what he knows as his family.

I would hope they could find a way to make everybody happy. Even if the dog really does belong to his first owner, I would hope he could stay with his family.
I think that would be the kindest thing to do for the dog. There really is no  solution that makes everyone happy.