If both want to re-roll the dice at the same time, the player with initiative may decide who goes first. However, in this case, neither want to reroll and wait for the other player. You can't force the opponent to use an effect so it would go down like this:
1) The paladin can wait awkwardly long before doing anything, hoping that the opponent is dumb enough to do reroll with the temple of the dawnbreaker.
2) Since his opponent is a smart guy, he doesn't say anything. As a last resort, the paladin asks, "soooo, wanna reroll the dice?", which the opponent doesn't want to do (yet)
3) At this point, the paladin has 2 options, reroll dice, or apply damage.
3a) If the Paladin decides to apply the damage, the defender does not get the chance to reroll anymore. (neither player did anything)
3b) If the paladin decides to reroll with either of his abilities, the defender may choose to use the altar. Since the paladin has yet another reroll ability ready, the same situation occurs as in point "1"
edit, if after step 1 or 2, the defender would reroll, the paladin can of course reroll too afterwards.