Level 12 Analysis
Your AC is very low. At level 12, AC 18 is essentially a death sentence. I'm going to assume you have a source of Mage Armour from a party spellcaster, giving you an AC of 22, and a further Ring of Protection or Amulet of Natural Armour or Barkskin or something to up that by +2 to 24. 24 AC is still incredibly low.
The lowest attack bonus I found with a quick peruse of CR 12 monsters is +18, the secondary Bite of an Athach. That hits you on a roll of 6. The most common number I found was +23, which would hit you on a 2. I saw lots of +26, +28 and even a +33. Those all hit you on everything but a natural 1.
In other words, your AC is too low if anything targets you for you to survive. The DM will have to pull punches not to kill you.
Valiant Stand improves this. By not by enough. Enemies are still going to autohit you. Best case is +4 stat boosters on dex and wis, mage armour, nat armour/deflection bonuses, and valiant stand - 18 base, +4 from enhancement to stats, +4 armour, +2-+3 nat armour/def, +3 valiant stand = 32. That's a hit on a 9 from the lowest common attack bonus I found on CR 12 monsters.
Your Attack Bonus Is Pretty Decent, For a Monk. You have +16 to hit without Smite. With Amulet of Mighty Fists +2, that's +18ish to hit. With Belt of giant Strength +4 or Bull's Strength, that's +20 to hit. Everything that has AC that is supposed to be a defense has 26+, which is good - you hit most of the time. Power Attack and Flurry are counterbalanced by Valiant Stand, which you should be endeavouring to have always active by use of Stealth, which you don't have maxed out, uh, why? Popping up out of nowhere for a flatfooted smiting power attacking flurry should be your opening round action in every combat. Even your iteratives have a decent chance to hit, with this hit bonus. Only decent, though.
Your Damage Isn't Great. 1d10+1d4+5 (where is that errant +1 damage coming from?) averages out to 13 points of damage per strike. With Power Attack, that's 19 damage. With Smite, against evil or chaotic outsiders/dragons, you get /+18/, so 34 damage per strike, which is actually level 12-worthy. Too bad you get 3 total attacks per day with that damage. Sweeping Smite carries the Cha-to-hit bonus, but not the damage from the 'first hit'. It's kind of like a really terrible whirlwind attack that way.
Most of the time you'll be attacking for 19, on average. Some stuff is immune to bleed, or has DR/cold iron and good, etc, so it might be less. If you move, you only have one attack, so your first round barring stealth will nearly always be one attack at best. Rounds after that, you can flurry for four attacks, each which might hit for 19 damage.
So a max damage on an ideal round of around 34+19+19+19 damage, or 91 damage in 4 hits. That's not terrible. It relies on getting a full round action, though. It also relies on hitting with iteratives, DR of the kind you can get past, no miss chances etc. Most monsters at this level have at least 150hp, so you won't be winning in hp races. But you will be able to contribute a bit at least to the usual team of four on one beatdowns.
Your HP gets eaten in a round. With your AC, most CR9+ melee monsters are going to kill you to dead in a round. 11 Constitution on a melee combatant isn't a great idea, but then, you're a monk and need wis and and dex and str and also cha for being a paladin, so eh.
Your Saves are decent. They could be better, but they could also be worse. Most DCs seem to hover around DC 23 at this level, going up as high as 28 but also as low as 21. With your +11/+11/+13, you should have a 50% shot at most saving throws, and although fear and poison aren't exactly the most common life-threatening things to save against, it's still nice.
Power Level: Fighter.
This character can be relied upon to be roughly as good as an unoptimized fighter. The DM will have to pull some punches, and tough encounters (CR +2 or greater) will have a good chance of one-shotting this character by accident. In a party with Rogue or better power levels, this character will feel notably weaker than the rest of the group.
Note
Evaluating something without gear is hard, because at the lower end of the scale, gear can have more effect on your ultimate spread of numbers than the classes chosen. If your gear is random stuff, you will be weaker. If you plug it all into boosters for your FOUR necessary stats (dex, wis, str, cha), rings of deflection and other stuff that helps boost your melee stats to make you 'great' at that rather than 'mediocre to good', which includes buffs from friendly spellcasters, you will be stronger.
Note
This build is stronger at lower levels, where a handy Mage Armour plus your defensive stats can put you out of reach of opponents attack bonuses, and things are easier to hit and easier to kill. Level 12 is definitely where things are starting to go 'downhill', and they will likely get worse as enemy AC and AB increase and every enemy has flying or spells and abilities.
Note
The build has no movement capability other than skills-based climbing, swimming, jumping. I'm assuming again allied spellcasters will be patching that hole with buffs, especially since with the other gear i've assumed in your build you don't have the money to buy gear to get flight or teleport or whatnot.
Suggestions
Your main problem is that you're playing a monk. Without serious optimization, monks are very weak. You've done a bit of optimization here, and pushed it up to unoptimized fighter level, but fighter is still not great if you're planning to be in a party with casters. Or if you're fighting caster-style enemies like many demons are.
Most of the tricks I know to make melee characters more competitive are in 3.5e. I'm assuming there's no backward compatibility in your group. So that's all out the window.
Paladin isn't giving you much other than flavour, either. You've got a decent Flurry and Attack Bonus, but you're way too fragile to make good use of it, unless your enemies come in the 'always attack the guy using the full defense action with the tower shield' variety.
In this case, i'd recommend Summoner. Synthesist Summoner. It slices, it dices, it buffs, it has level appropriate abilities, natural attacks, the works. It is, in fact, so good that you could mix it with a Paladin dip and still be relatively awesome.
Evangelist lets you keep advancing as a Summoner while also adding a divine feel to the class. It's also the only prestige I can find that advances your eidolon aka living armour, so.
Other. than. that... there's a good rogue-based fear build, but I don't know how relevant that is to your concept.
I feel like there's some way, between Fighter archetypes and the Hungry Ghost Monk monk archetype, to create kama-wielder who reaps ki from his opponents and uses it to chain-stun them with a huge Wisdom and Dex, just whittles them away with flurries of weak, ki-reaping attacks and then spends the ki on stuns. There's too many damned archetypes though.
Even if you're taking summoner, it's kind of worth dipping monk as well. You have to be unarmoured to use your synthesism, so you could benefit from a high wisdom score to your AC. Not worth going Hungry Ghost, because the ki-drain only comes at level 5. Just a one, or at max 2-level dip. Probably after you have 1 or 3 levels of synth summoner.
Yeah I cannot find anything that is about punching people that isn't just a Fighter or Barbarian with a 2-hander sword that is any good. There's some rogue stuff that is nice, there's an alchemist archetype that gets sneak attack and would make a murderously effective hand to hand combatant with the mutagen and the buffs. But nothing based around jumping on things and punching people except synth summoner. Yeah. That's my advice.
Synthesist Summoner 20.
Optional; Monk 1.
Optional; Evangelist.
Best Answer
First things first, you have to identify the problem. If his AC is too high, you could review his sheet and check if he didn't calculate something wrong (it happens more often than you could believe).
If he built his character around that much defense, he will have other flaws, but lets take a look at the information you gave us:
Well, even though his AC is so high, his offensive power is that of a lv1 character (or lower), he will hit easily, but that damage is too low for a character of his level (7th).
His AC is actually 26, +9 from full plate armor, +3 from heavy shield (+2 base, +1 from shield focus), +2 from ring of protection, +1 from evasion, and only +1 from his dex modifier (it's limited by his armor).
Then, look for options that will "break" his strength, without hurting the others too much. There are a few options for that, based on the Knight class:
Reflex and Will Saves
The Knight's reflex and will saves are bad, and the class is a martial based on charisma (similar to a paladin, but with nothing to boost the saves), which means the character is vulnerable to spells and effects that target those saves.
The character could take two powers that boost his saves against fear and charm effects, but everything else means he is weak against it. Illusions, necromancy, create pit, fireballs, entangle, web, etc.
Spells that grant negative conditions, such as shaken, nauseated, entangled, exhausted, or sickened, are all good options, as some of those will lower his strengths and allow enemies to have a better chance against him.
If you really want to see him rage from a failed save, make an enemy cast Create Pit on him. And watch him strip after a bunch of failed attempts at climbing up (remind him that he has a -8 penalty from armor).
Touch Attacks
Most spells will either allow a saving throw, or a touch attack, or both.
Knowing this, you should know that touch attacks will be checks against the character unarmored AC (10+ dex bonus + dodge bonus + deflection modifiers usually), which is much lower than his armored AC.
There are lots of enemies that can use touch attacks, so a quick look on the bestiary looking specifically for that feature will give you many candidates for an encounter. A quick look on the wizard/sorcerer spell list should be enough to find good spells to throw at him. Corrosive Touch, Mudball, Shocking Grasp, Acid Arrow, Scorching Ray to name a few.
Creatures that use touch attacks should be balanced against the whole party, as only monks should have a high touch AC.
Flying Enemies
If he built a character around defense and melee attacks, a flying enemy will be way out of his reach for most of the time, unless someone on the party casts a Fly spell on him. But even with the spell, since he wears heavy armor, his 40 feet flying speed should be lower than most creatures.
Difficult Terrain
As I mentioned, he wears heavy armor, which means that unless he takes a lot of levels on the Fighter class, his speed should be lower than average (20 feet or so). Difficult terrain should be a nightmare for his character, as he will move only 10 feet per move action.
There are tons of ways for the GM or the enemies to put him into that situation. Most forests, swamps, deserts and mountains are difficult terrain (most GM's ignore this). There are spells (like Entangle or Web) that will force the terrain to become difficult for a period.
Ranged Attackers
Again, his character is slow and built around melee attacks. So ranged attackers, specially if flying or above ground level, should be a pain for him to deal with. Even more if they are able to move and move faster than him (and they probably will).
Combat Maneuvers
Combat Maneuvers are an option, as his CMD should always be lower than his AC. But being a martial, his CMD is still fairly high compared to the rest of the group.
If you have a group of enemies and they have the opportunity to flank him (which also grants a bonus on the CMB check), one of them should attempt to trip or grapple him.
Trip will lower his AC (-4), limit his actions, and force him to take attacks of opportunity to stand back up.
While grapple will force him to not move towards other enemies (like their boss which happens to be a spellcaster or ranged attacker), it will also reduce his AC (-4). If he is tripped and then grappled, his AC should be much lower now. Just keep in mind that, unless the attacker has reach or the proper feat, they will take attacks of opportunity as well. But since his damage is low, they should probably be able to take a hit or two and still trip/grapple him.
Aid Another
Aid Another is the simplest action that a henchman can take that will help his side to bring down a stronger enemy (the knight). This will allow them to make an easy check (DC 10) using their attack bonus to help another character to succeed at something.
This can be used on attack rolls, raise the AC of their boss, help tripping or grappling an enemy, and whatever else you can think of.
Encounter Advice
The cultists you linked have sneak attack and the command spell. I know that their sheet says that they will only use command on emergencies, but a towering enemy wearing a full plate armor should probably be a higher emergency than saving it to escape. Commanding him to drop prone will help them to grapple and probably pin him in maybe two rounds. You will have to consider their intelligence (10), or if their boss could come up with that idea on his own (14 int, probably yes) and tell his henchmen to do it.
For their boss, his AC is actually on par with your knight. His suggestion should be used as soon as possible on the biggest and dumbest enemy he can see charging at his beloved cult, while his invisibility is a terrible idea to use at the start of combat (despite what the developer said), as most of his other options are offensive and will be wasted casting early on. Instead, he should use his copycat as often as possible (he has 5 uses and they last 6 rounds), to prevent attacks from hitting him. On top of that, his Reaper's Mask allows him to cast the Confusion spell twice per day, with a DC of 16 (minimum to cast the spell).
Let me add that whoever wrote those cultists did a terrible job at it, their feat selection is awful. Selective channel with -1 charisma. The feat does not say it affects at least one target, meaning that it does nothing at all. They took martial weapon proficiency simply to use war razors (they get +2 to conceal it) instead of using daggers or short swords (their deity's weapon) and take Skill Focus (Sleight of Hand). And why on earth would he take Weapon Finesse if he already got Finesse Rogue? I suggest you replace at least two of those three bad choices with teamwork feats, such as Precise Strike, or something that suits their sneaky murderer role, such as the lines of feats for Strangler (3 feats total).
Again, all of these are simply hints on how to make combats difficult for him. Remember that the objective of the game is to have fun, so you create challenges that they must overcome. If you, as the Game Master start to play against your players, they will get annoyed or worse, and might not come back next session.
So don't abuse these extra challenges, make his character shine in combat once in a while and he will have fun with the character he built. Throw a Stone Giant against him so he can brag about it ("I survived the blows of a giant!").
PS: There is a thread going on at paizo.com exactly about the subject of how to use creatures against your players. It's worth to take a look for a few hints, lots of good advice there.