Oh yeah, a common story for many of us dog owners. We often run into people who turn the other way when their own dogs are acting up but are more than happy to turn a pointing finger at others. It happens its better to leave them be.
However she was right in that leash laws apply, buuuuut.... nuisance laws apply to barking dogs as well so she should not have really said anything.
I always have an extra leash somewhere in the house though, for emergencies like these. You don't need anything fancy but you never know when one might come in handy, you know?