Thanks for the responses. The server is still 5.5 and has not been updated, but is in the planning for April, hopefully when 6.5 is released.
After reading other posts it seems that it's not advisable to upgrade directly from 5.5 to higher but first to 5.6.
Is this feasable or would it be beter to copy data and emails over from the old to the new server? (10 users)
One other thing that I have found is the masq file is empty, it looks like the update script is trying to make new ones but does not have the proper rights to rename/move/delete the old file. Any idease on this?