should I say or do something???

At this point, I would just be alert.  The father may have meant to spank and missed - or there may be other explanations as well.  By staying friends and keeping a good relationship, you can be around to observe any sure signs of abuse.

Also, if mom was upset, let her try to resolve it first, parent to parent.

Again, this is all just my opinion.

...my instinct is to watch and wait.   I think he just got soooo mad at the little one who was being a royal pain in the azz. 

The good thing is the mum will always tell me when he's gone off his head a bit!  He does have a temper i've seen it - not pretty.  Scares the cr*p out of my daughter she wouldn't ever misbehave in his presence!

I just think it's a real shame that your kids are scared of you.  And today the two girls started physically bullying my daughter, first time I'd seen that.  and that's probably because their role model uses physical violence to get his way.

In the eyes of the law, injury is abuse.  

I'm good with that definition.

I spanked my kids, but never came close to a bruise....I would be horrified if I bruised one of my kids.

If it were me, I'd report it and let the authorities sort it out.

I think my first step will be to speak to the teacher in school.  Just voice my concern.  I know for a fact this is the first time he's gone that far.

My daughter is sleeping over at their place on Tuesday.  Kinda less than comfortable than I would usually be.

I have no idea what the law is in Australia...teachers here are "mandated reporters"......and they would report bruising such as you describe to the Division of Family Services.  The DFS would make a visit to the home, with the Police.  

In my world, and in my view, if you strike a child to the point of injury it's abuse.  

It's an awkward one for sure...but if I'm honest the child's welfare is the most important thing here, not the guy who's building my house, not my friendship and drinking partner his wife.  I will sleep on it and make a decision in the morning.

This. I would never trust my kids around him. I am not sure I'd even babysit them anymore. Suppose someone else notices and he tries to cover himself by lying and saying it happened at your house? If she told you that he hit her, she is already complicit in the abuse.

Assuming it was purposeful, how the hell could anyone hit a 4 year old hard enough to leave a bruise? I think I swatted my kids maybe twice on their butts the entire time they were little,

There are days I'd like to strangle my 16-year old son, but given his years of TKD and now MMA, I'm the one most likely to get the bruises.

x2. You can make an anonymous call to CYS or the police. They will investigate, they may continue to check up on the family, and if needed, they will try to get services in place (anger management, or parenting skills, or whatever). 

Take the long view - if you do nothing, and no one else does anything to intervene, when the kid gets older, there are real risks of more serious injuries, How would future you feel if the kid got a broken bone, and you were left wondering what REALLY happened?

I agree with Brian.

I was thinking about this last night when I was going to bed.  I spanked my kids and it has never left a bruise.  In fact can you even imagine how hard you'd have to spank/hit a kid in order to leave a bruise?  Try hitting your own leg or butt to see how hard you'd have to hit to make a bruise.

Per the others, I strongly recommend reporting the abuse to the police.  Not only is there physical abuse, but the psychological abuse that goes along with an angry parent will have life long impact on those children.  They will likely grow up being angry and abuseful towards those around them because that's what is modeled for them.  If the Dad gets some help he can turn the boat around.

A report does not mean he will lose his kids. A judge has to order that, based on evidence collected. I don't know your county agency or state laws, but a call to the local agency could also get them services that help this not to happen again and keep a family intact.

You do not know for a fact that is the first time. You may be right, and reason to believe it. But you cannot know for certain. What o do know for certain is that this happened at least once.

And if you fear him and the repurcussions, imagine being 4.

One of the most awkward things I've ever done is escort a woman to a safe house for domestic violence. I was shocked initially, and thought I knew he husband well. We were pretty close for my professional relationship. But I coulnd't hesitate to advocate for her, no matter how it changed my relationship with him.

Child is 4. No grey area here. Call.

I agree with what you've said and you said it very well imo.

If he's capable of doing that to his children, it would concern me greatly him having custody of mine.

It would appear they will do it as a matter of every day procedure, I'm not involved at all - right now!  Do you know, the backlash is irrelevant.  What's important is that the little girl doesn't get another bruise, or worse.  That is all that matters.