raz - What you could do is create a temporary object(about the same size as the ball) that checks for overlap - if the overlap is true, then don't create the ball. Something like this:
->On click - Create temporary object at click position
-->If temporary object overlaps ball object - delete temporary object,
-->Else - delete temporary object and create your ball object
In fact, you might even be able to just create the ball, immediately test for overlap and delete it if there is. I'm just not sure if that would cause a problem with physics or not, and I can't test it where I'm at...
Hope this makes sense...