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I was playing with my Daemonic legion led by Be'Lakor and he has a rule that if a spell cast at him you roill miscast on any double.  Well the player i was playing against rolled for a flame template spell and rolled double but claimed he was targetting an out of range unit with the spell that was onthe other side of Be'Lakor.  They were clearly out of range and BeLakor was the closest  target.  I let him do this nothing came of it but is this legal?  I know it is a bit on the shady side.

Unless I'm crazy, you cast the spell before you resolve it's effects. That's part of the fun of the magic phase. "Am I in range? What the hell. 8, nice."

"Is he in range? I don't think so. I'll let it slide."

"23.5. Got ya!"

As far as I know, it's just like shooting. If you choose to shoot at something out of range, you don't get to shoot at something else. Same deal for magic. You cast, dispel if desired, and then resolve effects. If the target is out of range, you resolve nothing.

So he should have bitten the bullet, taken the miscast, and learned to be more careful next time.

Don't you have to nominate whom you are casting against prior to rolling to see if the spell goes off. e.g I am casting X spell at unit Y.

So isn't the error on both sides. One for not clearly stating the target, and the opponent for not requiring it.

For most spells, yes: You nominate the target, then roll for casting. Spells like the Comet, however, don't care.