Hey, thanks for the quick reply. I do have the Widescreen mod and the Unfinished Business mods installed, perhaps they are causing the problem.
I tried walking all around the area but no luck, even attempted to cast Dimension Door to see if I could access the bit of the area behind the house that was visible, didn't work.
I guess I'll have to use the console, thanks again for the reply and the code to the sword.

I think it's the Unfinished Business mod that causes the issue. I ended up using the console for the sword a couple times. Not sure why it decided to work all of a sudden on my last run though.

I've discovered the reason for Umber Hulks not appearing, after looking through other forums it seems that the sword Pale Justice is now a reward for a cut quest that was restored in the Unfinished Business mod called the Voice of Durdel Anatha and the Umber Hulks only appear after finishing this quest, but the quest does not always work properly.
So it seems the code is the only sure way to go.

This is what worked for me. Talk to Nym, have him tell you that he stole from both, The Hand and Dorns Deep. Go to the mines and enter the egress that looks like binoculars. Stay put until you eliminate the attacking monsters. Go only far enough to converse with Brother Harkin. Tell him to stop tormenting the spirit. The suit of armor will attack you, but you will be given a second conversation option with him. Answer correctly and he will be at peace but will ask you to bury his bones in consecrated ground. You receive 225,000 xp. Now the umber hulks will spawn in the artisan district and you can collect Pale Justice. Take the paladin's bones to the sister in the temple in Kuldahar. She will give you an awesome set of armor and you will receive 600,000+ xp.