An aero club fly-in was organised at a property strip. One of the activities organised was a session of assessing skill and judgement in the form of flour bombing. The target was placed near the southern threshold of the north/south strip, and the contestants were to fly at 60 -65 knots, at 200ft AGL, drop the flour bomb and land straight ahead on the remaining section of the strip. The passenger in the accident aircraft was a private pilot whose licence was not current. He sat in the left control seat whilst the pilot flew the aircraft from the right control seat. After take-off into the north, the pilot flew a left circuit followed by a level approach at about 200ft AGL towards the target. The passenger dispensed one flour bomb out of the left window and the aircraft then descended as if to land straight ahead but then entered a climb. As the aircraft climbed, it was observed to drift left of the strip before commencing a teardrop turn to the right with increasing angle of bank. During this manoeuvre, the aircraft suddenly adopted a nose-low attitude and dived into the ground from a height estimated by witnesses to have been 130-150 feet AGL. The flaps were in the retracted position at impact. The passenger reported hearing the stall warning horn operate during the turn shortly before impact.