cannot sync outlook.com contacts with android 4.1.2

I have all my contacts stored in Outlook.com. I  cannot sync them with my phone Motorola Defy+ rooted and running Android 4.1.2.

I have tried removing my hotmail account and re-adding. All contacts are then resynced fine. However if I make a change on the server, or locally on the phone, then those changes are not synced.  I am using the standard Android People app.

Calendar and email is working fine, just contacts.

appreciate any help

thanks