Principle of laesio enormis - Where the consideration is less than half or more than twice the true value of the property, the sale is voidable.

Recently, the Hon'ble Supreme Court of Sri Lanka in A. Arangallage Vs Pauline Herath & Ors threw light on the Aristotelian concept of justice and the Roman law ‘The Principle of laesio enormis’. The relevant portion of the judgment is extracted herein under; 

“The principle of laesio enormis is succinctly summarised by C. G. Weeramantry in The Law of Contracts, Volume I, p. 332 as follows:  

“A contract may be avoided by Court on the ground of laesio enormis either when the purchaser pays more than double the true value of the thing or the vendor sells the thing for less than half its value…. Where the consideration is less than half (or more than twice) the true value of the property, the sale is voidable on the ground of laesio enormis unless there is some special consideration present in the case which bars the application of the principle”.  

"In light of this argument, this Court notes that the principle of laesio enormis has been recognized and applied by Superior Courts previously. However, in the present case, it is imperative to ascertain whether the facts of the case fall within any of the accepted exceptions to this rule as it has been strongly argued that the principle does not apply to sales made under the authority of the Court."  

In support of this contention, several authorities have been cited. J. W. Wessels in The Law of Contracts in South Africa (1937) (Vol. II at p. 1345) stated that  

“In Holland, the remedy was not allowed when a sale had been made by public auction under a judicial decree in execution of a judgment”.  

As per Voet in The Selective Voet being the Commentary on the Pandects, Volume III (Paris Edition of 1829), XVIII. 5. 16 (p. 350), 

 “Remedy does not apply to sales in execution – nor again does the remedy apply if the sale has taken place by public auction on the Order of a judge with a view to the execution of a judgment”  

"In view of this, C. G. Weeramantry in The Law of Contracts, Volume I, p. 335, citing Voet, specifically states that “Laesio enormis does not lie in the following cases:-  

3. The remedy does not lie in the case of sales made under authority of Court but it lies in ordinary sales by public auction”." 

"Similarly, in Law of Property, Volume III (2nd Edition), Wijeyadasa Rajapakshe P.C. at p. 312 expressly states that   

“Enormis laesio does not apply to a sale made by Order of a Court or when directions had been given to an heir by a testator to sell property at a certain price.”