The pilot, who was a part-owner of the aircraft, had arranged to take some friends on a scenic flight over beaches to the north of Sydney. The aircraft made an apparently normal takeoff, into a wind of about 10 knots. About one minute later, the pilot advised that an engine failure had occurred and he requested a landing in the reciprocal direction. At this time the aircraft was at a height of about 400 feet above the ground. Witnesses observed the aircraft commence a turn with a bank angle of about 30 degrees. Height was lost rapidly, and after turning through 180 degrees the aircraft collided with the roof of a factory and burst into flames. The survivor escaped from the left rear seat shortly before the front section of the aircraft fell through the factory roof to the floor below. A number of witnesses had heard the engine splutter before the exhaust note died away, suggesting a problem with the aircraft fuel system. It was determined that the engine was delivering little or no power at the time of impact. No evidence was found of a mechanical defect or malfunction which might have caused the power loss, and the reason for the apparent engine failure was not established. At the point where the pilot commenced to turn towards the aerodrome, the aircraft did not have the necessary gliding performance to reach the runway. The terrain ahead of the aircraft in the takeoff direction afforded a greater chance of a successful forced landing. The reason the pilot elected to attempt to return to the aerodrome could not be determined.