The truck towing the caravan pulled over to the left and partially across the fog line of the single lane. The dark car pulled out, crossing the double yellow lines to pass the truck.
Following behind was logging truck driver Earl Anderson.
He told the coroner he saw the people mover pass the truck ahead of him and thought the driver was "f..kn crazy".
Mr Anderson said all of a sudden another car appeared in front of them.
The car passing was just half way past the truck at this point.
Mrs Uttley swerved to the left to avoid hitting the oncoming car. The Uttley's Holden Astra drove on to the grass verge.
The Uttleys and the people mover passed without colliding.
Mr Anderson saw this and thought "that was close".
The car then veered right as Mrs Uttley tried to return to the road. As the car came back on to the road it rotated and crossed in the northbound lane and slid into the path of the northbound logging truck.
"All I could do was hit the brakes before impact," Mr Anderson told the coroner.
"I swerved the truck to the left, but I couldn't avoid it. The car hit the truck before ending up in a paddock."
Mr Anderson called the emergency services and went to help.
The Uttleys died at the scene.
Mr Anderson said he was "pissed off" because the driver that caused the crash had not stopped.
Another witness, Samuel Murray, said the people in the people mover in front of him "appeared to be looking, pointing out the windows, and reading something in the middle of their vehicle."
He watched the car pass half over the yellow lines on the up-hill blind corner saying it was a "stupid manoeuvre."
He had to brake hard to avoid hitting the back of the truck which had braked hard to try avoid hitting the car.
Other witnesses told the coroner it was "disgusting" the driver of the people mover had kept driving.
A Taupo police officer set up a check point later that day looking for the people mover.
Constable Nicolas Weight stopped a vehicle and spoke to a driver who "looked rather shocked and didn't seem to understand" when questioned about a crash.
The driver refused to comment further and refrained from making any statement when spoken to during the police investigation.
Senior constable Iain Cheney told the coroner he was "satisfied" the fatal crash was precipitated by the driver of the northbound dark coloured people mover crossing the double yellow "no passing" lines separating the opposing lanes while passing on the crest of a hill.
Mrs Uttley took evasive action to avoid a head-on crash and that caused her to lose control of the car, Mr Cheney said.
Mr Cheney said no-one could positively identify the vehicle involved.
Coroner Christopher Devonport said the overtaking vehicle failed to stop and the driver was "blissfully unaware" of the tragic carnage they caused.
He said there was insufficient evidence for police to take any further action against the driver at fault.
Daughter Caroline Uttley said it was a tragic and unnecessary accident.
"The family would have liked those who caused it to have taken responsibility."
Ian and Christine married in Gisborne in 1965 - the same year Ian scored the only try in Wellington's victory over South Africa.
He played two matches at centre for the All Blacks, at home against England in 1963. He was known as the grey ghost because he could glide effortlessly through the opposition's line.
