I'm just thinking that if it's in his name only (and therefore you didn't see or sign any paperwork at the time) it may well have gone through as a gift at the time of sale, and that can be excluded (from the usual lists that Zoopla etc use with the final sale price included).
You should discuss this with your solicitor. The purchase price may be recorded at the Land Registry. Do you know how he paid her and when? He could be asked to produce the bank statements (assuming he paid her from bank account) to disprove your allegation.
I'm no expert but I did the conveyancing on a recent house sale when I bought my step mum out her share of a house, just wanted to save on legal fees. I had to record a price on the documentation. Have you spoken to the land registry yourself? They're very helpful.
Id really have thought a price would have to have been put down, to make sure it wasn't liable for stamp duty and also because of possible capital gains tax implications for the SIL.
Your lawyer should be able to demand bank statements for that year from both your ex and the SiL, and if there was payment this will show up somewhere.
It all depends really on what happened when MIL gave the house to her DC.
She could have transferred the whole thing to her son (for good estate planning/tax purposes), on the understanding that her daughter was entitled to 1/3 of it nominally. Your DH may have honoured MIL's wishes and and gave SIL the money for her share when you bought it off her. No land or property changed hands, no records will show this. It means your SIL may never have had a right in the property documented with the Land Registry.
One step up is that MIL's will, or some other document or chain of documents shows that DH held 1/3 of the property on trust for SIL, and that he bought her out of her share. If there is a document showing that he now owns the whole thing, but not showing a price, if you can show something - anything - pointing at £170k it might help you. DH will still have bought a right in property, just an equitable one instead of a legal one (technical difference, makes things harder to prove). There's also the argument of fair market value (a greedy SIL may help you on this front, it may not).
But for £170k it sounds like you may have your work cut out for you.
If your SIL bought a property with the cash she'd have had to prove to her conveyancing solicitor where she got the money from in order to satisfy money laundering checks. If you can find out who that solicitor was your solicitor can ask them, or ask the judge to ask them, what they knew the source of her money to be.