It also depends on the batting. If you are using a poly or poly blend batting, it might melt when you iron down the leaves. (ask me how I know.) Personally, I would applique first and then quilt. Also, it would be easier to maneuver just the top for the applique as compared to the whole sandwich.
Altho, if you decide to hand applique, you could quilt first and make sure that you are not stitching down thru the sandwich while appliqueing the leaves.
Pretty pattern.