"So sorry to have to comeback to you again McDarren. I'll try not to trouble you again after this.... "

You should never feel like you need to apologise for asking advice. That's what SOPW is for :)

Anyway, this is almost certainly a permissions problem. You need to ensure that the user the webserver runs as has appropriate permission to write to the directory involved.

Here is an example that I've tested, and works (with appropriate permissions set):

never.cgi

#!/usr/bin/perl -w
use strict;
use CGI qw/:standard/;
use Cwd;

print header();

my $dir = getcwd;
my $param1 = qq(hello, cruel world. A test;  for \\\$neversaint.);
my @args = (
        "$dir/never1.pl",
        $param1,
        "$dir/test/never.out"
    );

system(@args) == 0 or die "Code does not work:$!";
exit;
[download]

..and the script that is called:

#!/usr/bin/perl -w
use strict;
my  $text = $ARGV[0];
my  $outfile = $ARGV[1];

open OUT, ">", $outfile
    or die "$0 : failed to open output file $outfile:$!\n";
print OUT "THIS IS YOUR INPUT TEXT: $text\n";
close OUT;
exit 0;
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and after loading the cgi script in my web browser:

cat test/never.out
THIS IS YOUR INPUT TEXT: hello, cruel world. A test;  for \$neversaint
+.
[download]

Cheers,
Darren