Tony Smith, the head of a group of former residents who allege they were abused at the Home for Colored Children, took Dexter to task as the premier was answering reporters' questions outside the legislature.
Smith and his group, the Victims of Child Exploitation Society, have been pushing for a public inquiry for months, and they've rejected the premier's decision to appoint an independent panel to hear from them.
"We are acting on exactly what they requested us to do," Dexter said. "They have a fundamental misunderstanding of the nature of inquiries."
At that point, Smith stepped forward and interrupted Dexter, saying: "I have a clear understanding of inquiries."
"You're not listening to us. ... We had not agreed to an independent panel."
As reporters shifted to catch what Smith was saying, Dexter said if the media wanted to hear from Smith, he would leave. But as the premier turned on his heel and headed toward the legislative chamber, Smith apologized and withdrew.
The confrontation didn't last long, but it highlighted the thorny challenge Dexter has faced dealing with hundreds of allegations that date back decades — a disturbing case that the premier likened to another dark chapter in Nova Scotia's history.
"We cannot afford another situation like Shelburne," he said, referring to the former School for Boys in Shelburne, N.S.
In the late 1990s, the Nova Scotia government paid $61 million in compensation to 1,500 abuse complainants without first checking their stories. The province then faced lawsuits filed by former workers falsely accused of abuse.
Dexter said the independent panel, which has yet to be appointed, would serve the same purpose as a public inquiry.
Smith said that wasn't true.
"What is missing is the teeth to get to the truth," he said, adding that an inquiry under the Public Inquiries Act would have the power to subpoena documents and reluctant witnesses.
Robert Wright has been appointed to draft the panel's terms of reference. He spent three years implementing a provincial child and youth strategy after a public inquiry into the case of a young offender whose stolen car struck and killed a Halifax woman in 2004.
The government said Wright will meet with former residents to develop the panel's terms of reference within two months.
Liberal Opposition Leader Stephen McNeil said Dexter's actions are dividing Nova Scotia's black community, and he repeated his call for a public inquiry.
"This is politically motivated to get beyond an election campaign," he said outside the legislature.
"We're losing sight of the fact that so many years ago these victims were children and no one listened to them. And now, the government is not listening to them again."
Like Smith, McNeil said the independent panel will be weak without the power to force witnesses to appear.
Progressive Conservative Leader Jamie Baillie agreed.
"The relationship between the government and the victims has broken down so much that nothing short of a full public inquiry will do."