FYI if anyone else encounters this problem, try the following:
1. Turn off Windows Updates and disable the 'Windows Update' service.
2. Delete everything under the following folders;
C:\Windows\SoftwareDistribution\Download
C:\Windows\SoftwareDistribution\DataStore
3. Download this Microsoft fixit from their site. Launch and select theAggressive option.
4. When prompted, restart Windows.
5. Enable Windows Updates and it should successfully download and install the failed updates.
Note: Prior to this, I had tried the System Update Readiness Tool for Windows 7 (KB947821) [May 2013], but it didn't work.
As an alternative, you could perhaps skip Step 3, restart after Step 2 and proceed with Step 4.
Some may have other solutions that have helped them, it'll be good to read to assist others.
Hope this helps.