The more pertinent question is, does anything in the real world happen simultaneuously? That all depends on what division of time you go down to; seconds, milliseconds, nanoseconds, picoseconds and so on. Eventually you will reach a point where things aren't happening simultaneously, because the degree to which you can subdivide time is infinite. This would also also be the case with any theoretical computer system, even one designed for that purpose, due to the fact that no matter how high a timing resolution you specify as a parameter for your hardware design, there is always a higher resolution.
Modern collision detection systems work, both inside and outside of the field of games, because it doesn't matter, so long as the collisions happen at what is perceptually the same time. The human brain has it's limits to what it can perceive as continuous. Generally frame rates in games don't need to exceed about 60fps for this reason -- same as a flourescent lights running at 50-60Hz AC. And 60Hz is, from what I understand, well above the limits of our rate-of-perception, in order to appear continuous even in worst-case scenarios.
EDIT: This post describes the practical realities, however see Martin Sojka's comment re the theory of time divisibility, below. Thanks Martin!