I tried the same with a test shop of 1.3.5 and the functionality works as expected.

Was your v1.3.5 a fresh (clean) installation or an upgrade?
Did you modify any admin files? (if unsure, you can perform file comparisons with something like winmerge).
If the admin files are unmodified (by you), try uploading the admin files and it's subdirectories to your sever again (ftp).

Make file and database backup before making changes.