If your system vm is not currently working you have to make it work. On XenServer you can do this by SSH'ing to it and upgrade java.
apt-get update && apt-get -y install openjdk-7-jre-headless openjdk-7-jre-lib && apt-get -y remove openjdk-6-jre-headless
and it should now work. In some rare cases you have to restart the cloud service
service cloud stop && sleep 3 && service cloud start
and in some even rarer cases you have to restart the ssvm. Do that from the Apache CloudStack UI.