re %C , because it is?
Must be some global hes got to activate or disbale the command ie:
set %c $cr | ; disabled event
unset %c | ; enabled event

anyway, the problem was his ACTION command, it should be DESCRIBE to make an action! (man that makes heaps of sence)

Code:
on *:text:*!kill*:#: { 
  if ($1 == %c $+ !kill) { 
    [color:blue]describe $chan $nick has been killed.[/color]
  } 
}