Nah, didn't need to devour his ghost (or maybe I already had) - I found a workaround though. If you pickpocket the house key from the paladin's then open the door, Gareth triggers the next part of the quest and it goes normally from there. I finished the quest and Gareth wandered off - not sure to where though, as now he seems to have vanished into thin air and still isn't back on the ship?
Not sure if intentional or still bugged....
