Both ladies were down in Mexico earlier this month celebrating Philip Green's 60th birthday when the supermodel ran into the actress jogging on the beach.
According to a party-goer Kate was munching on a bag of chips and yelled:
"'Oi, what you out jogging for?' Gwyneth fired back, 'So I don't look like you when I get old'. Kate was speechless for a second then spat back and threw some crisps at her. She said, 'Why don't you eat some f****** carbs!'"
We never knew Gwynie had such a razor sharp tongue…and we kinda like it. Ha!
[Image via Adriana M Barraza/Lia Toby/WENN.]