Was I correct?

Hello all. I would like your opinion. I was walking my dog off lead, returning from a long walk in the fields, on a footpath on my housing estate (almost home). My dog is well behaved and simply sniffing at stuff. There is a single track public road that runs parallel with our footpath. The road is lower than the footpath and separated by a grass verge, a fence and hedgerow approx 21m (69ft) apart. A lady was walking on the road, slight behind me, and shouted "my dog is very nervous, get your's on the lead!" I took offence due to her attitude, but remained calm. 'Who is she to dictate to me', I thought. 'the dogs are nowhere near one another and separated by a physical barrier'. I replied, "if you standstill for a minute we'll be gone". She didn't respond, but did stop walking. What would you have done? There are no wrong answers, Thanks in advance.