One guess would be that the parser for system does things in the standard Unix way. This will break the command into arguments, using spaces as seperators. This would make the system command break into:

1) the 'start' command
2) a first argument 'C:/Code/Perl/Phi'
3) a second argument 'Kap/temp.html'

That is why it doesn't know how to open 'Phi', which it sees as a file in the directory 'C:/Code/Perl'.