Quest Bug: Recovering cloudcleaver Misc Quest

After running into Hlormar Wine-Sot Northwest of Caldera I find out he's been stripped of his clothes and his beloved axe, Cloudcleaver, by a witch named Sosia Caristiana. I aggree to hunt her down and Hlormar follows closely as we make our way up the trail. Soon we encounter the witch and I get her side of the story. Sosia then gives Hlormar an offer to return the axe at the Caldera Mages Guild in three days. I descide to side with Sosia and delivers her terms. Hlormar refuse and then says that he intend to kill me along with Sosia. Dialog ends but..

Hlormar does not attack or turn hostile.
I Speak with Sosia again to ask about Cloudcleaver; she thanks me for my help assuming I've delt with Hlormar and awards me with a few potions.
I then speak with Hlormar again and he's still expecting me to help him get rid of the witch and get his axe back.

I have not tried siding with Hlormar to see if Hlormar will turn hostile toward Sosia or the otherway around.

It's nothing game breaking and it's just a minor side quest but it does bring back fond memories.
Not sure if I can help solve the issue, but I will if I can.

EDIT: I have now tried siding with Hlormar but he will not attack under any possible scenario. He will not engage Sosia even after I've attacked her. After defeating Sosia and retreaving Cloudcleaver I then choose the option to keep the axe for myself which ends dialog and should prompt Hlormar to engage me, which he does not. I even tried taunting him which effectively ended the dialog option but Hlormar would not attack.
However, I can choose to return the axe to Hlormar and he will then reward me with two points of strength and the quest is finnished.