Steps to reproduce the issue

In administrator/index.php?option=com_config -> server -> Mail Settings
Setup SMTP - I used smtp-relay.gmail.com, port 587, No SMTP Authentication.

Expected result

Send test Email should send a test email. This works via say Contact Form or a custom code on the site.

Actual result

Got system error

Test mail could not be sent.

Could not instantiate mail function.

System information (as much as possible)

System Information
Setting Value

PHP Built On Linux instance-1 3.19.0-56-generic #62~14.04.1-Ubuntu SMP Fri Mar 11 11:03:15 UTC 2016 x86_64
Database Version 5.5.5-10.1.12-MariaDB-1~trusty
Database Collation utf8_unicode_ci
Database Connection Collation utf8mb4_general_ci
PHP Version 5.5.9-1ubuntu4.14
Web Server Apache/2.4.7 (Ubuntu)
WebServer to PHP Interface apache2handler
Joomla! Version Joomla! 3.5.0 Stable [ Unicorn ] 21-March-2016 22:00 GMT
Joomla! Platform Version Joomla Platform 13.1.0 Stable [ Curiosity ] 24-Apr-2013 00:00 GMT
User Agent Mozilla/5.0 (Windows NT 10.0; WOW64) AppleWebKit/537.36 (KHTML, like Gecko) Chrome/49.0.2623.87 Safari/537.36

Additional comments

Joomla Mail Setting works fine. Only the Send test Email did not work.