To answer this question, you need to relate the garden party in all of its frivolous glory to the death of Mr. Scott and Laura's visit to him at the end of the story. Let us just remember that when Laura hears about the death of Mr. Scott, she wants to call the garden party off, and her mother is only able to distract her by pointing out how beautiful she looks in a new hat. Vanity seduces Laura, causing her to forget about Mr. Scott and her moral objections to celebrating whilst nearby a family copes with the death of one of its members.
However, at the end of the story, Laura goes and visits the family and sees the body of Mr. Scott laid out on the table. Note what she thinks as she looks at him:
He was given up to his dream. What did garden parties and baskets and lace frocks matter to him? He was far from all those things. He was wonderful, beautiful. While they were laughing and while the band was plahying, this marvel had come to the lane.
This quote stresses the superficial and meaningless nature of the garden party, as being based on "baskets and lace frocks," which completely blinds us to the "marvel" of life and death as represented in the corpse of Mr. Scott. Mansfield in this story therefore uses the garden party to point towards the way that society acts as something that prevents us from truly seeing and truly living, realising what life is all about.