Two families have reached a custody agreement - with visitation clauses - over a 4-year-old shih-tzu/silky cross.

On Tuesday, a couple from Russell and another from Morningside in Whangarei were arguing over the ownership of the dog, being kept at the Far North District Council's Kaikohe pound.

The dog - named either Wilson or Bear depending who you asked - was microchipped to the Morningside family, but had spent the past 14 months in the care of the Russell couple.

He was impounded after he escaped the Russell property.

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FNDC animal control team leader Ken Thomas then sought legal advice after both parties asked for the dog to be released to them. The council had refused to release the dog until there was mutual agreement.

By the early-afternoon on Tuesday, the Morningside couple had agreed to let Bear stay in Russell, provided they could visit him.

Mr Thomas said he had never seen a situation like it.

"Both families love this dog so why not come to some kind of resolution as to which side of the fence it should be released to?" Mr Thomas said.