Former nursery owner asked to pay back £1.6m from sale

Tuesday 17 January 2023

The former owner of a children's nursery is fighting a bid to make her pay back £1.6 million of the money she received for selling her business amid claims from the purchasers that they weren't warned about certain regulations.

Dawn McLachlan has been told to return 60% of the £2.6 million she got when she sold Organic Kids at Castle Quay to nursery operators Busy Bees.

The penalty relates to damages based on the limit to the number of children that could be enrolled at the nursery. Ms McLachlan is being penalised for not informing the new owners of a procedure it had to complete to ensure the nursery had the correct staff-to-children ratio.

Representing Ms McLachlan, Advocate Olaf Blakeley branded the decision to penalise the former Organic Kids owner "absurd and irrational".

Pictured: The case is being heard in the Royal Court.

The advocate explained that Mrs McLachlan had run children's nurseries in the UK and Jersey for 25 years, but had retired owing to ill health in 2019, and sold the nurseries in Jersey to Busy Bees.

She had a voluntary agreement with the government's Children and Early Years Service that if she wanted to take on more children, she would check how many more staff she had to recruit – to ensure that the staff-to-child ratio remained within the rules.

The number of staff a nursery needs depends on both the number of children and their ages.

Advocate Blakeley said that most nurseries calculated the number of staff they needed themselves but Mrs McLachlan checked hers with CEYS.

Busy Bees wanted to increase the number of children at the Castle Quay nursery from 46 to 69, but the agreement to check with CEYS was still in place when they took over.

Advocate Blakeley said: "That was the only difference between what was promised and what was delivered – the only difference.

"All they had to do was pick up the phone to CEYS and check the number.

"As a result of that minor difference she is being told to give back £1.6 million.

"It's not only a clear mistake but a perverse decision. We say there is no logical basis for this calculation."

However, Advocate Stephen Alexander, representing Busy Bees, argued: "The business delivered was quite some distance from the one Busy Bees expected. Had Busy Bees known, the purchase would not have happened."

He added that the calculation had been made by a legal expert who was obliged to act fairly, and should therefore be trusted.

The hearing is expected to finish today. Commissioner Sir William Bailhache is presiding with Jurats Charles Blampied and Robert Christensen sitting.

Pictured top: The former Organic Kids run by Dawn McLachlan. (Rob Currie)