As part of a refresher check on the aircraft, the instructor required the pilot to use the manual system for lowering the landing gear. After turning the crank handle the recommended number of turns the gear down light did not illuminate. The pilot continued to rotate the crank handle a few more turns and a loud bang was heard, following which there was little resistance to crank handle movement. However, the gear down light still did not illuminate although the visual gear position indicator in the cockpit did indicate that the gear was in the down position. The gear actuator circuit breaker was reset and the gear selected up; the gear did not retract but the gear unsafe light illuminated. All further attempts to obtain a gear down light were unsuccessful. Observations made from another aircraft and by persons on the ground indicated that the gear was down and locked. The aircraft was diverted to Bankstown and the gear collapsed immediately after touchdown. A fault in the gear indicating system prevented illumination of the gear down light when the gear reached the down and locked position on the initial manual extension. When the crank handle was wound further, an overload failure of the actuator housing occurred. The gear was unlocked when the up selection was made but the damaged actuator prevented either retraction or safe extension. The actuator has a vital function in retaining the gear in the down and locked position as it pre-loads the landing gear braces in an overcentre position. Once the actuator was damaged, gear collapse on landing was inevitable.