Emergency services were called to Forbury Rd about 12.30pm following reports the driver had fled the scene. He was later located by Dunedin police.
Senior Sergeant Brian Benn said it appeared the 52-year-old man, who was forbidden from driving because of a medical condition, had a medical event while driving his Ford van along Forbury Rd.
His van rear-ended a yellow Mitsubishi Lancer, shunting it across the intersection of Victoria Rd and into the path of a south-bound grey Mercedes, he said.
The driver of the Mercedes was attended to at the scene by St John ambulance staff.
Les Wilkins, of Mosgiel, whose Mitsubishi was badly damaged in the accident, said he approached the driver of the van after checking his wife was not injured.
"The driver just gave me a couple of grunts and then he just took off ... I couldn't believe it," Mr Wilkins said.
The driver was later located and charged with disqualified driving and dangerous driving causing injury.
Snr Sgt Benn said St Clair cafe patrons were shielded from the oncoming vehicles by the Mercedes, and the accident had the potential to be "much worse".
