James is going to back off and Quckdraw a stun shuriken.
I'm not sure exactly how the spirit being water based is going to affect resisting it. Looking in the toxin section, the attack could be seen as ingestion based, but to me that implies more food and drink that must be swallowed. If I could just close my mouth, then the toxic spirit would be pretty ineffective. So I think that they chose inhalation as the vector because it's kind of like drowning - you don't have a lot of choice about whether or not it gets in your mouth or nose. In either case, it seems that a gas mask would work to protect you as it would prevent the liquid from reaching my mouth and nose which is a prerequisite for both vectors.
With that assumption, he'll activate the gas mask as a simple action and convert his last simple to a free and use it to run toward the mage using the trees as cover.
Throw Shuriken:
14d6t5 4Not great, but maybe the spirit will roll poorly. He's at -1 for this being the second attack against him this IP in addition to all of his other penalties. James is banking on this disrupting him otherwise he's kind of leaving Inanna in a lurch, but she seems capable of handling herself against a weakened spirit. Of course, if the spirit wants to protect its master, it'll probably take off after James anyway.
EDIT: The quick draw requires a roll:
Quick Draw:
14d6t5 4 against a target of 2 (3 - 1 for the Rapid Draw Power) - success!