Tough one silentscope… I’ve been on the receiving end of neighbours loose dog killing my animals and I can tell you it is infuriating. Especially when breeding and raising for specific traits which all get wiped in a matter of one doggy rampage. I didn’t report the owners or dog because the dog has always been friendly enough but owners refused to pay damages which was upsetting to say the least. I just made a mental note that the dog would have be shot on sight if it set one paw on the property again.
I’d just take the loss and comply with them. Could’ve been worse really. What constitutes a menacing animal is very clear and your dog now matches that description. Don’t think you’d get anywhere with the council to be honest.
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