Filename with ' character causes errors

This possibly an old reported error but I will describe for documentation
The problem lies with the image module. I thought the transliteration module might prevent this sort of this from happening.

Using an image field, one of my clients tried to upload a 622KB file with this filename:
Let's Test.png

The attempt to upload this file (in chrome browser) caused this php error :

Error message An unrecoverable error occurred. The uploaded file likely exceeded the maximum file size (128 MB) that this server supports.

The attempt to upload the same file (in Firefox browser) caused this AJAX error :

An AJAX HTTP request terminated abnormally.
Debugging information follows.
Path: /en/file/ajax/field_image/und/0/form-nCYcsIIeMIAwT6mZt_OKww54-d_cyIBpHietZrlnedw
StatusText: n/a
ResponseText: Internal Server Error
The server encountered an internal error or
misconfiguration and was unable to complete
your request.
Please contact the server administrator,
webmaster@xyz.org and inform them of the time the error occurred,
and anything you might have done that may have
caused the error.
More information about this error may be available
in the server error log.
Additionally, a 500 Internal Server Error
error was encountered while trying to use an ErrorDocument to handle the request.
Apache Server at www.xyz.org Port 443
ReadyState: undefined

Uploading the same file with this filename Let's Test.png is successful.