An ambulance was at the scene and crew were treating one person, who did not appear to have serious injuries, she said.
A neighbour who saw the crash said a woman in a black car appeared to have suffered a medical event and had stopped in the road.
He heard a loud bang and saw a green car go over the bank with three children in the back.
The children appeared to be unharmed and were being comforted by another neighbour.
The neighbour said a man who appeared to be known to the driver who went over the bank arrived at the scene and was acting in an agitated manner towards the driver of the other car.
There had been a number of similar incidents over the past few years, as the road was not wide enough and people tended to come down it too fast, he said.
Another witness who saw the crash from a nearby property said he was appreciating the view when he saw the black car roll into sight out of the corner of his eye then the green car disappear over the band.
He did not see the collision itself, but he heard a loud crash.
He described the crash as ''pretty horrendous'' and was concerned the green car could have kept going right through the house at the bottom of the bank.
He was glad there appeared to be no serious injuries as cars could be replaced but not people.
A Fire and Emergency New Zealand spokesman said two crews, from Lookout Point and St Kilda stations responded.
When they arrived all people were out of their vehicles.
Crews assisted with minor first aid, he said.
A St John spokeswoman said an ambulance and a quick response vehicle was sent to the scene.
One patient was transported to Dunedin Hospital in a moderate condition, she said.
