VANCOUVER - The former owner of a mansion in Vancouver's exclusive Shaughnessy neighbourhood must repay a $300,000 deposit after the sale of the property fell through because she didn't tell the buyer about a suspected gang-related murder of her son-in-law at the front gate of the home.

In a British Columbia Supreme Court decision issued last week, Justice Paul Pearlman says the would-be purchaser of the six-bedroom, 10 bathroom mansion was the victim of a “fraudulent misrepresentation.”

Feng Yun Shao backed out of an offer to buy the 9,000-square-foot mansion in 2009, just days after she had agreed to pay about $6.1 million for the property after forwarding the deposit.

Court documents show she was told the 84-year-old owner, Mei Zhen Wang, had moved back to Guangzhou, China, and her daughter, who lived in the house, wanted to move to West Vancouver to be closer to her child's school.

But neither Wang, her daughter Gui Ying Yuan, nor their realtor told Shao about the November 2007 unsolved slaying of Yuan's husband, Raymond Huang, and Pearlman's decision says the death was a factor in the decision to sell.

He has ordered Shao's deposit be returned with interest.

Pearlman also dismissed Wang's claim that Shao breached the contract and owes, not just the deposit, but a further $338,000 to cover the difference between Shao's offer and the $5.5 million eventually paid by another purchaser.

Wang was living in China in 2003 when the judgment shows she forwarded funds to her daughter to buy the mansion, and then joined Yuan, Huang and their children in 2004.

The extended family was living in the home in 2007 when Huang was fatally shot by an unknown assailant.

Wang returned to China later that year but Yuan, her children and a sister continued to live at the home until June or July of 2008.

“(Yuan) maintained that she had no concerns for her safety, or the safety of her family following her husband's death,” writes Pearlman, although he also notes that media reports linking the case to organized crime prompted the private West Point Grey Academy to request Yuan's pre-teen daughter leave the school.

The girl was accepted at another exclusive private school in West Vancouver. Yuan bought a home there and the mansion was listed for sale in June 2008 but languished in what the court was told was a soft market, before being relisted with new agents in 2009.

Yuan told the court her husband was a businessman whose enterprises included a trucking company and a restaurant. She denied he was involved in any criminal organization.

Both Wang and Yuan testified Wang's return to China and Yuan's desire to be near her daughter's school were key factors in the decision to sell, but Pearlman ruled there was more to it.

“It is entirely consistent with the probabilities of the situation that then existed, that Ms. Wang would fear for the safety of her two adult daughters and her grandchildren while they lived at the location where Raymond Huang met a violent death,” he writes.

“I find that the murder of Raymond Huang was also a reason why the plaintiff wished to sell the property.”

But Pearlman writes Yuan, on her mother's behalf, didn't share those concerns with her realtors so when Shao inquired about the reason for sale she was only told about proximity to the new school.

“That representation, while true on its face, was incomplete. It concealed the fact that Ms. Yuan's daughter changed schools as a result of Mr. Huang's death, and that the death was a factor in the plaintiff's decision to sell the property,” writes Pearlman, noting that is one key element of fraudulent misrepresentation.

He says Shao wanted to move to Shaughnessy because she understood it was “prestigious, safe and quiet” but he says she was entitled to an “accurate answer” and “relied on the plaintiff's representation regarding the reason for selling the property.”

Pearlman says the fraudulent representation sets aside the contract of purchase and in addition to the return of Shao's deposit and interest, he has also awarded her some of her legal costs.