Quick Fix
Check that this error isn't resolved by just changing the Mailer (Joomla > Global Configuration > Mailer settings). Alternate between PHPmail and sendmail just to check this isn't the problem. If the problem is still there then check the below:

Tried both PHPmail and sendmail
So if this happens irrespective of whether I have PHP mail or sendmail set as the Mailer.

Notice
Could not execute: /usr/sbin/sendmail
Warning
Registration failed: An error was encountered while sending the registration email. A message has been sent to the administrator of this site.

Check you can send email from that server

ERROR:
Message not sent. Server replied:
Connection refused
111 Can't open SMTP stream.

One common problem people have is an incorrectly setup mail system. Here is a list of rules that must be followed:
I took this from Direct Admin but it has some useful guidelines for these kind of issues:

How to setup the Mail System

1) hostname must not match any domain that is being used on the system. Example, if you have a domain called domain.com and you want to recieve mail on This e-mail address is being protected from spambots. You need JavaScript enabled to view it , you must *not* set your hostname to domain.com. We recommend using server.domain.com instead. You must make sure that you add the A record for server.domain.com so that it resolves.

2) The hostname must be in the /etc/virtual/domains file.

3) The hostname must *not* be in the /etc/virtual/domainowners file.

4) The hostname must resolve. If not, add the required A records to the dns zone such that it does.

5) The directory /etc/virtual/hostname must exist.. (eg: /etc/virtual/server.domain.com). It must not contain any files.

6) Any domains that you want to use for email (eg: domain.com) must be in both the /etc/virtual/domains file and the /etc/virtual/domainowners file. The directory /etc/virtual/domain.com must exist and the files /etc/virtual/domain.com/passwd and /etc/virtual/domain.com/aliases exist.

7) File permissions for virtual pop inboxes should be (not applicable with Dovecot/Maildir):
/var/spool/virtual/domain.com 770 username:mail
/var/spool/virtual/domain.com/* 660 username:mail

8) Ensure your hostname does not contain any upper case letters.

9) Make sure that your main server IP has a reverse lookup on it.

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