gallery not saving images and PHPthumbof not generating

Hi

Not too sure what im doing wrong, but i installed the gallery add on in rev v2.3.1. I created an item chosen an image, went to upload image and find that the image doesnt upload. when I view it on the web page the image src shows as:

/assets/components/gallery/connector.php?action=web/phpthumb&ctx=web&w=100&h=100&zc=1&far=C&q=90&src=%2Fassets%2Fgallery%2F1%2F2.jpg

i have looked in the error log and found the 1st line shows as:

[2014-10-08 12:32:47] (ERROR @ /assets/components/gallery/connector.php) [phpThumbOf] Could not generate thumbnail: /var/www/site-domain.co.uk/public_html/assets/gallery/1/1.png - Debug: Array
(

and there is tons of lines of errors

i have looked in the files manager and can not find the above folder location... could this be something to do with being able to write to this location file/folder permissions issue?

please advise